HML & Conventional Loans for Agents

[Mark Weinstein]

Hey Guys,

I have 2 separate questions I would like to ask regarding financing for a rental property. The first one involves using a HML and the second one is regarding getting a conventional loan with my income/profession.

1) How does a hard-money loan work when financing a rental property? As a flipper these loans are convenient because of the time but when you have a 30-year mortgage I'm wondering how this can even be an option? Even if you plan on refinancing to pay back the HML, the time it takes to build up that equity in the home would make this so expensive that I can't see how it's even an option.

2) The second question involves conventional lending. As a realtor I’m self employed and 2021 (for the year 2020) is going to be the first time I don’t file a W2. I have tax returns from 2018 and 2019 from the W2 job/s I worked. As a realtor, I’ve only closed 4 deals so far this year and I’m sure the banks don’t want to hear “Covid” as the excuse for slumping production. I’m almost certain I won’t get a mortgage based off my inconsistent realtor income this year and it doesn’t help that it’s self employment. Would I be better off purchasing the property before the next tax filing so I can use my W2s from the last 2 years? Or does it pretty much become irrelevant since I don’t work at the job anymore, so if they were to do some kind of verification they will find that out.

I’m planning to buy my first property at the end of this year but the financing seems like it’s going to be very difficult. My credit is solid (650, not great but not terrible) and I have about $20k in the bank that I’m hoping to get up to around $35k when it’s time to purchase. If both of the questions above can be answered and some extra advice tips would be much appreciated.

Thanks in advance BP fam!