New business Owner, getting a loan for rental propertys

[John Gach]

So I finally completed my first year of being in business, I tired to lower my taxable income as much as I could being a business owner.  Now I want to invest in real estate/rental propertys (doubles).

I look on paper like I made less money than when I previously worked at a company, but I have more money than ever in my checking account.  I'm new to all this so Im wondering, do they look at my yearly income and then decide I didn't make enough money, so I'm not elidible for a loan, or do they take into consideration all my writes offs, and determine I am actually making more money than before?

Just curious if anyone has been in this position, and if they think I could even get a loan?

[Chris Mason]

Hi @John Gach,

Lenders do not look at your gross OR net number, we do math based on tax returns that typically arrives at a number in between those two.

But, in your case, since you don't have that "2 years of self employment" box checked, you should look into "alternative documentation" or "non-qm" loans that will either ignore tax returns and focus on bank statements instead, or base the approval purely on the cashflow of the property. In the latter cashflow-based scenario, getting an above average deal is basically a loan requirement.