I have become self employed this year.
What do I use now to show my income?
1099 forms
1099s wont work for conventional…you’ll need at least 1 years of filed tax returns…more than likely 2 years.
1099s may be possible for hard money or private money; possibly for commercial (local banks)
thats definitely a downside of becoming self employed.
Who are you trying to prove income to? If you work with Hard Money Lenders you dont have to show income. They are lending based on the property itself on on the person. If you are looking for a loan for a bank, good luck. You best chance is to work with a local bank in your market place rather than a national bank.
Happy Investing
I’m just planning for the future, in a couple years I would like to see about purchasing a new primary residence. My previous loans were done with W2.
So two years of tax returns? Do they look at the AGI?
Great question, Bill. I came from that environment. In fact, one of the maxims I’ve learned the hard way is “Banks lend when you don’t need the money”. In other words: prove to the bank you don’t need the money, and you can do it without the bank, and the banks want to be your best friend.
Here’s the good part: Two years is a long time. The current economic crisis will look completely different in 24 months. Therein lies the opportunity. There are so many incredible opportunities in real estate that you can take advantage of today. It’s perfect timing for you to start investigating your options.
One of those might be fix and flip investing. I say “might be”, because it’s important to understand all of the ramifications (both risks and opportunities).
That said, I feel like now is an excellent time to buy properties, fix them up and sale them for a profit. I can say that because my wife and I are doing it every month. And we work with people to make it happen for them as well. Hard money happens to be a pretty elegant solution to getting the cash and having sort of a “bank partner” in bed with you in regards to creating some significant profits.
If you need some insights please let me know. Also you need to keep in mind that the lending guidelines are going to continue to change over the next two years. I am not sure where in the country you live but there are so many opportunities buying properties.
To your Success