Help Needed: Screening Applicants without W-2 Jobs

[Marc Miller]

I’m relatively new to land lording and need some opinions/advice from more experienced investors. How would you screen someone’s income in the following scenario:

An applicant for one of my units said he is semi retired. He said he lives off his stock investment portfolio and has a small computer business with two employees. His income varies from month to month, and it sounds like the computer business isn’t a full time gig.

What type of documents should I ask from him to ensure he meets the 3x rule?

Any help is appreciated!

[John Warren]

@Marc Miller I have run across this several times while renting A class rentals here in La Grange, IL, and it is fairly simple to do. You can ask for several month's or even a year's worth of his business bank statements if he is running his business the right way. This would show generally how much he makes. Business income will be less steady than W-2, but you can take the average and you should be fine. 

For the stock portfolio, just ask him to send the last two or three statements. That is easy to check through, and if he really has a significant balance then you are in a perfect position here.