What paperwork do you require for self employed applicant?

[Alyssa K.]

Have an applicant that looks good on paper, met them and like them a lot. Young family. He makes good money (hardscape), she’s a stay at home wife with a baby (she’s a permanent resident as of last month). They were honest about her not being on their current lease because she didn’t have papers yet (but does bow); and I always appreciate honesty. They are young, appear to make their money in cash, and are lavish in their spending (lots expensive nights out, $75,000 truck loan😳, 10k personal loan, 10k 4-wheeler loan 😳, $600 for boots etc) BUT despite all that he owns his own company and makes enough where the numbers still work. All that said to ask, what paperwork do you require of an applicant who is self employed? They’ve given me 4 months of bank statements. To verify the business is legitimate, I feel like I should ask for more, but am highly suspicious he is getting paid cash...and not sure if I care/that’s a red flag, when all other indicators point to paying rent wouldn’t be an issue.

[Nathan Gesner]

Originally posted by @Alyssa K.:

Primarily I’m wondering if renting to someone self employed, what measures do others typically take to ensure the business is legitimate.

Tax returns, for two reasons. First, it shows longevity. For all you know, he's scamming people and spending advances that haven't caught up to him yet. Or maybe he'll decide he could make more in another city or state. Second, legitimacy. If he's paid in cash, how do you know he's not dealing drugs or doing something else illegal. If they don't follow the law and report taxable income, then they are unlikely to follow your rules.

When I see someone that young earning that much money as self-employed, it's a huge red flag that something isn't right. Maybe he's legit, but the fact that he's spending like a drunken sailor, getting paid in cash, and doesn't have tax returns would all indicate something is wrong.