I am a 5th generation self employed, type-A, overachiever.

We live in Santa Barbara and rent here because my wife has an employment contract and we plan on moving closer to her family in LA once the contract is over, and that is 18 months from now.

A year ago I went through the whole process because of one's enthusiasm only to find out I was denied because I had less than two years of self-employment tax returns.

Unlike passive rental income, the income from an active trade or business is subject to self employment tax (a nasty 15% tax commonly referred to a "social security and medicare" by working folks).

nice location, 1/2 mile from a well established town 30 min from the the capital raleigh. house going for 13k plus back taxes of 3k.built in 1901 remodeled in 1945, 879 sqf 1 bed 1 bath. needs total gut remodel and major system upgrade. the issue is they have tenets in the house now, family of four, dad cant work bc of heart conditions. unsure of moms employment. landlord says they have been paying rent, but I have no hard records of that.  

I would also do a rental verification, employment verification, and criminal background check on the boyfriend, assuming this is part of your current tenant approval process. 

They're from people who are contractors/self employed etc.  

When you do "short-term," you're actually considered an "active business" subject to self-employment tax as well as your personal income.When doing wholesale (for example) through an S-Corp, you may treat part of your net gain as a distribution wich is not subject to self-employment tax.

I've really gone from full-time employment to a contract position but have less than one year of self employment history and as a result cannot seem to qualify for a conventional A paper loan despite great financials and solid assets. 

Disclaimer: The foregoing is for comment and discussion purposes only, should not be construed, and may not be used, as (a) legal advice, or (b) to abate in whole or in part any interest or penalties for, related to, or in connection with any tax or imposition by any governmental authority having or asserting jurisdiction, or (c) solicitation of retention or employment, or for the furnishing of legal or non-legal services, or (d) to create a client-attorney relationship or privilege.