Hello Beloved BP Community - I come to you once again for advice:
I spent the last 10 years of my life being a W2 individual with decent income. During that time I bought and sold two single family homes (SFHs) which I personally occupied, as well as buying 4 duplexes with conventional mortgages which I still hold today (25% down, 30 year conventional fixed mortgages). Because of my W2 and lack of debt outside of real estate, the approval process was easy and straight forward.
In February I left my W2 job as an Air Force officer (extra info: one of my duplexes is using a VA mortgage). I've been attending training and studying to be a home inspector since that time. I am in the process of starting a home inspection business, but obviously this will not be a W2 job for me, and being self employed, my income will be variable and has not yet shown on my tax returns. At this point, my modest income is from 4 cash-flowing duplexes.
The good news is that I have a small pile of cash that I'd like to put into play. To use nice and round numbers/estimates, I have a 15k Personal Line of Credit, a 25k personal line of credit, a 40k Equity line of credit on 1 duplex, and another 35k equity line of credit on a different duplex. In addition to those resources, I have about 85k in paper assets/cash that I'm wanting to deploy. So to tally that up and use round numbers, I've got access to about 200k in cash that I'd like to put to work through SFH investments. Being a midwest/rust belt raised guy, I'm confident that I can find very simple and cookie cutter 3 bed 1.5 houses for about 60k in Michigan, Indiana, Ohio for 60k-ish and rent for $700 a month in decent neighborhoods. In my mind those are good investments. Finding the houses or how to allocate my cash isn't my question today.
My question is, instead of just buying 3 of these 60k houses outright in cash and not being able to use leverage, I would obviously prefer to get loans and use leverage in order to increase my cash on cash return. Now that I no longer have my W2 however and my income is currently low and variable while I get my business on its feet, will any lender consider giving me another mortgage? (yes I have separate money set aside for emergency funds)
To give you some more info that is probably relevant - my credit is good: my current monitoring service is showing 746.
I have no other debt besides what I mentioned above. No car loans, student loans, etc. All of my 4 properties cashflow and appear on my tax return. I am currently renting my personal residence and I do not plan to owner occupy any of these new acquisitions.
What do you guys and gals think? Do I even bother calling the Fannie/Freddie 'big' banks? Would I be a good candidate for a smaller community bank or maybe a portfolio lender? I would definitely be willing and understanding to put more than 25% down. Even putting 50% down could improve my COCR.
If you have a flexible lender that you think may be able to help me, please feel free to message me with their info.
Thank you ahead of time for your wisdom and advice!
Dave
