Employment history requirements

[Steven Berro]

Hey BP'ers,

I'll try to be as succinct as possible. Question: How long do I need to be employed in order for banks and/or credit unions to be able to use my income towards the purchase of a buy and hold SFR/MFR investment property?

Back story:  Sold a business. Moved out of state. Receiving payments from sale of  the business. Payments will continue for another 14 months.  Lenders want 3 years of income from the sale to qualify as income. So, non of the business proceeds qualify as income.

I'm currently a stay at home, home schooling dad. (And I thought owning a business was stressful. Can I fire my children?)  My wife works full time.  Our credit scores are around 730.  We have enough cash for 20-25% down payment.

I am willing to work in the same industry I was in for the past 18 years if that's what the lenders want to see.

The sticking point in obtaining a loan is our debt to income ratio.  I've met with banks, local credit unions, and brokers. Same response from all.  The loan will be to purchase my first income property.  I don't want to get stuck with a private or hard money loan without an exit strategy.  So, I need to able able to qualify for a traditional loan.

I know there are other financing strategies, such as seller financing that i could potentially use.  I'm looking for some answers to my question but also a view from the outside looking in.  Am I missing other options? 

Thanks for the help!

Steve 

[Chris Mason]

Originally posted by @Steven Berro:

Hey BP'ers,

I'll try to be as succinct as possible. Question: How long do I need to be employed in order for banks and/or credit unions to be able to use my income towards the purchase of a buy and hold SFR/MFR investment property?

Back story:  Sold a business. Moved out of state. Receiving payments from sale of  the business. Payments will continue for another 14 months.  Lenders want 3 years of income from the sale to qualify as income. So, non of the business proceeds qualify as income.

I'm currently a stay at home, home schooling dad. (And I thought owning a business was stressful. Can I fire my children?)  My wife works full time.  Our credit scores are around 730.  We have enough cash for 20-25% down payment.

I am willing to work in the same industry I was in for the past 18 years if that's what the lenders want to see.

The sticking point in obtaining a loan is our debt to income ratio.  I've met with banks, local credit unions, and brokers. Same response from all.  The loan will be to purchase my first income property.  I don't want to get stuck with a private or hard money loan without an exit strategy.  So, I need to able able to qualify for a traditional loan.

I know there are other financing strategies, such as seller financing that i could potentially use.  I'm looking for some answers to my question but also a view from the outside looking in.  Am I missing other options? 

Thanks for the help!

Steve 

 Getting a W2/salary job in the same industry as the business you sold should work right away. In theory even an accepted offer letter could do the trick (no one will preapprove you until you actually have that offer letter though). Staying at home with the kids is a legit reason for a gap in employment, even if you are a dad, in 2018. Have you been telling lenders WHY you've got an employment gap? If so, you may just need to do a little more dialing for dollars. 

Also ensure you're working with an REI friendly lender that'll count rental income from the property you are purchasing.