Only One Year of Income - How Can I Get Financing?

[Raimonds Lauzums]

Hello and thanks for taking the time to read this post,

I am 19 years old, almost 20. I dropped out of college to run my own business which does fine; beats serving burgers. I will be sending in my first 1040, netting roughly 25K in 2015. This year I am projected to net about 50K. I am able to show excel sheets showing I am on track so far to make the 50K. I have enough in the bank for a down payment, but not to buy anything outright.

Honestly, I know the answer to my question, which is "Will a bank give me a mortgage?" Honestly, it's a complete long shot. But I am getting so darn sick of waiting. I have been very patient last year, saving up my pennies, but I really need a property. I am very good at finding deals. I know you'd assume a 19 going on 20 year old is really naive in saying this, but for the sake of discussion, assume this is true. (My business revolves around finding and negotiating amazing deals every day). My father is in real estate but can't help me in any way financially, but he has been mentoring me since I was a toddler so I know a lot about real estate other than bank financing.

Houses by me are 75K-100K, so paying in cash won't work. I need financing to start. And I really need to start this year, I am not going to wait one more year to jump in the pool. I fear private money lenders will just scoop up the deals for themselves when I show it to them. 

Now put yourself in my shoes. You need financing from a bank. What would you do to get that mortgage?

[Marcel Theisen]

Hi Raimonds, 

Not to sound dumb, but why not ask the bank.  No point to sitting around wondering if they will give you a loan.  I live/work overseas so getting a loan is much tougher, banks ask a lot more questions and dig deeper but the way to get a loan is keep asking.  I would call a few banks, tell them your scenario and see what they say. If they say no, go in person to some smaller banks and/or credit unions and talk face-face. It will help if you have a property picked out that you think is a good deal. Use the Rental Property Calculator and print it out to show them the potential cash flow and prove that you have done your due diligence and are serious about investing. The fact that you have are running a successful business should work in your favor.  Good luck.