Think getting financing on real estate investments is not possible if you don’t have a W2? Think again. There are many alternatives that you might not have discovered and can make total sense.
If you’re just getting started or looking to grow your portfolio, but already have a primary residence and don’t have the debt to income ratio for a conventional loan, here you go! Allow me to introduce you to four loans that are considered “non-traditional”. I can tell you as an entrepreneur and investor myself, this has opened opportunities for me that would not otherwise be possible. I’d be happy to facilitate a conversation with a lender familiar with these loans.
The DSCR – The Debt Service Coverage Ratio loan is a great option for investors. The income from the property needs to cover the mortgage payment (with tax and insurance) to qualify. You need to have a 620 credit score or higher and they will do up to $3.5M. If you are thinking of an Airbnb, the way the lenders see this is that they look at the equivalent for what it would earn as a long term rental. So even though you’ll likely earn more as an Airbnb they will look at the comps for the 12 month rentals in the area. You’ll need to put at least 20% down and generally the rates are a few percentage points higher than conventional. At today’s rates, and with good credit, we are seeing around 8 percent. Seeing as this will be a business you’ll want to look at debt expenses slightly differently. Your accountant can also help you with this.
Non-Warrantable Condo Lending – Condotel – This is another option for investors with a 660 credit score or higher and looking for loans of up to $1.5M. Generally these loans will require 25% down or more and come at a higher percentage of 9-11%, but should a condo rental be on your wishlist it is something to consider.
Bank Statement & 1099 Loans – If you’re on a 1099 these loans may make a lot of sense. You’ll need a 660 credit score or higher, 10% down and you can get financing on 2-4 unit multi family, single family homes, condos and townhomes. You’ll need 12-24 months of bank statements and 1099s.
Mobile Home Lending – Things have changed and it is now possible for mobile homes built after 1976 to be an option for lenders (previously only younger homes). These can include single or double wide homes. Again, you’ll need a credit score of 660 or higher. Investors, this brings into reach mobile home parks, which I know are attractive to many. Note we are talking about mobile homes and not modular homes, which would go through standard loans.
Want info on these loans? Let me know so I can connect you with the experts to go over all your options. Now is the time to invest in your future and build wealth through real estate!