Hello all – I am in my last year of college and trying to get into real estate. I have about $80,000 saved up, but unfortunately i have never had a job and my credit is nonexistent. I make my income from playing poker and dont plan on getting an actual job out of college. My question is, is my only option just to save up more money and buy my first property using all cash? Is there any way I can get a loan with just cash and no actual job so I dont have to sink all of my cash into one property?
Using all cash is not a great option unless you are flipping quickly. You need to leverage yourself. It really depends what your strategy is. If you plan to rehab, you can find hardmoney lenders who don’t look at credit. If you want to buy and hold, consider trying a subject-2 strategy. There’s many ways to go.
I’m sure others here will chip in, but if you’re just getting started it’s easy to buy your first property if you have that 80k handy. In your case without a job, I’d say you’d have to get some kind of self employment type job and go stated instead of full doc for your mortages. You would pay a slightly higher interest rate, but 80k is a nice down payment and you probably won’t even use all of it, I’d say 5-10% of the purchase price would be enough. There’s lots of programs out there for first time homebuyers which is what you would be. You can then live in the house for two years and then sell it afterwards without any capital gains tax. I would also build up some credit, either by getting a few credit cards and keeping them paid off or a small car loan. What state are you in?
Conventional lenders offer No Income Verification and also No Doc loans. Stated income would not work because you need a 2 year history. Although, how do file your income on tax returns? Capital gain or schedule c, I assume a capital gain. Maybe an underwriter would allow a 2 year history of gambling.
Your credit would need to be reviewed to determine scores and qualifying tradelines. Do you have a credit report, has anyone ever gone over this with you?
If you are looking to do short term buy and sell, then hard money would be an easy option.
Contact a mortgage consultant to discuss all your options.
I would be VERY surprised if a lender lent on gambling tax returns. If you can find one then more power to you.
Your best bet is subprime. They can typically lend to people with low or no credit and limit the amount of money you need to put down on your purchases. You might even be able to find some 100% loans if you were lucky.
Also, get yourself a couple of major credit cards, use them a little every month and pay them off monthly. This will start your credit history. If you are looking to purchase something fairly expensive like jewelry, vehicles, electronics, etc, then finance it even though you have the cash and pay them off on time. You must establish good credit for yourself asap.
Start building you credit and start and LLC. You may want to consider alternative real estate investment opprotunities like:
Note buying
Hard money lending
Assignment of contracts, etc.
If your scores are there you can do 100% No Doc. The only think looked at would be your score, tradelines and 12-24 month rental/mortgage history.
Also, it sounds like you are self-employed. This could be done as a stated or no ratio loan for a self-employed borrower with a CPA letter- if you have had a CPA do your taxes for past 2 years.
Take your time, keep playing Texas Hold em, and get yourself some credit cards, secured and unsecured, open some trade lines. Build your credit.