Can I just vent for a second? I’ve had three cups of coffee and can hear colors arguing over whose hue is superior. I’ve got to get this rant out before I have a caffeine-induced stroke.
Our family has been self-employed since 1999. We’ve specialized in real estate investing since 2006. That’s a long time. It’s been fabulous and freeing and all the things one can imagine…until the Hubs and I go to buy a house for, God forbid, ourselves!!
My husband can analyze cash flows, estimate ARVs, and negotiate offers like he’s in an HGTV showdown. We can build houses from the ground up, navigate the pitfalls of city permitting, and even help others build wealth through real estate—but mention that we want to buy a home for our own family, and suddenly, we become a financial wild card.
“Self-employed, you say?” the mortgage underwriter raises an eyebrow. “We’re going to need two years of tax returns, bank statements, letters of explanation, a signed affidavit from your third-grade math teacher, and maybe your blood type. Just to be safe.”
Meanwhile, our W-2 friends are getting preapproved faster than I can say “debt-to-income ratio,” all because they have a magical thing called a pay stub. Apparently, that tiny slip of paper holds more power than our 60-personal financial statement showing eight flips, five rentals, three new builds, and the fact that we haven’t missed a payment since Blockbuster was still a thing.
But wait! There’s more! The dreaded “write-off dilemma.” As any savvy investor knows, the key to not giving Uncle Sam half your soul is writing off everything legally possible. That cup of coffee during a contractor meeting? Write-off. The paint samples from Lowe’s? Write-off. The conference you attended in Vegas? Okay… maybe half of that.
But here’s the catch—those write-offs shrink your taxable income, and guess what the bank uses to qualify you for a mortgage? That’s right. Your taxable income. According to our tax returns, we make about $37.52 a year.
And then there are those glorious years when your tax return shows a juicy profit—enough to make your mortgage lender do a little happy dance in their ergonomic desk chair. But just as they’re about to approve you, they flip to last year’s return… and there it is: that big, beautiful loss. Suddenly, the mood shifts. You go from “promising borrower” to “riskier than a fixer-upper with a foundation issue.” Because if there’s one thing real estate is known for, it’s feast or famine—and mortgage lenders want to see two solid years of you feasting, not surviving on ramen and sheer willpower.
So now we’re sitting across from a loan officer, explaining that, yes, while we technically some years look like we “made nothing,” we actually always do make something. A lot of somethings. And I swear we can pay the mortgage. But unless I can time-travel and amend two years of tax returns, we’re out of luck.
You know what the real kicker is? After all the scrutiny, the lender graciously steers us toward their in-house loan—complete with a higher interest rate. Because nothing says “we trust your financial savvy” like penalizing you for excellent credit and nearly two decades of surviving the wild rollercoaster that is the real estate market. Meanwhile, someone flipping burgers at McDonald’s (no shade!) might qualify for a conventional loan with a lower rate, despite earning less and possibly quitting next Tuesday. But us? The seasoned investors? Try getting a personal mortgage and suddenly we’re treated like a financial liability armed with a Pinterest board and a dream.
In conclusion: real estate investing is glamorous—until you try to buy a house for yourself. Then you realize the system was built for people with jobs that come with watercoolers, not tool belts and spreadsheets.
But that’s okay. Because we self-employed real estate folks are used to creative solutions. If we can turn a condemned properties into a cash-flowing beauties, surely we can find a lender who understands the hustle.
Or at least one who doesn’t flinch when we say, “we’re self-employed.”
The Overly Caffeinated Agent 