Having trouble with getting my first property

[Marquell Jones]

hello BiggerPockets. I have found a great house in my market. I just spoke with my mortgage broker earlier today and he told me since I am 1099 wage earner that it is going to be hard for me to get any type of loan for my first property. Granted I make 50K Plus in salary, but after my expenses are taken away I'm only making 13 a year in salary and 1000 and some change a month. He said that my income is not high enough to get any type of house. Also he said that I will have to work much harder with the current job that I have now 2 offset my expenses and generate more income a month. He's told me that I could go about it with a cosigner that makes a decent amount per month maybe around 30k a year at least and that would put me at the 35000 year to get the house. So I need help bigger pockets is there any other way that I can get into this house with me being 1099? Or do I need to change jobs with a W2 W-4 tax bracket? Any kind of advice or if you've been in this situation I know somebody that's been in this situation would help me greatly. Thanks.

[Andrew Postell]

@Marquell Jones your questions are exactly why Bigger Pockets is a great resource.  These are all standard questions that many self-employed people have and you are going to get the answers you need right here.  So you are not alone in your queries.   This might be lengthy but Private Message me if you need.   My first recommendation is to continue to search for a lender that has experience and expertise in investment properties.  It's a little strange but banks will have different rules and finding one that fits you will be sort of like finding the right shoe, or barber, or mechanic.  They might all do the same thing but they might not be the best fit for you.  Keep searching.  Secondly, let's take a "worst case" scenario - that you make less than $0 per year.  There are loans specifically designed for you!  They are what's called "portfolio" loans.  A portfolio loan can simply be defined as a bank's private money - their portfolio money!  What most banks lend and what loan type most investors try to use is what is called "Conventional" money - money governed by Fannie Mae or Freddie Mac (if you recognize those agencies).  To put is simply, conventional loans qualify you based on your Federal Taxable Income.  The loans are great but for someone who is self-employed you need more flexibility.  Portfolio loans are a little harder to find - for example, a very large bank might require  you to have $250,000 just to gain access to them.  Most of us choose to ask smaller banks - the local banks - about their portfolio loans.  Some may not have any options so you may have to shop and call around - or go to some investor club meetings in your area to learn what other investors are using.  But they are out there.  I lend 2 main portfolio loans for investors - A "Bank Statement" loan - where we use your deposits in your bank statements to qualify your income (you must be self-employed to use this) or a "Cash Flow" loan - where we just lend you money based on the cash flow of the home.  Both loan types ignore your taxable income!  I would highly recommend to not make ANY career or pay changes until you find out more on these products.  In the general sense, the rent money you make on a Single Family Home will offset any mortgage you have - that's the idea at least.  Taking on a new debt that cash flows does not mean you need to work harder - you just did all the work to find that house!  So we just need you to qualify for a portfolio loan and you can be off to the races!  My company does lend in Alabama so Private Message me with any further questions.  Thanks!