It’s so hard! (That’s what she said!)

One of the investment strategies I am planning to use in 2019 involves buying a worn out house with cash, fixing it up, renting it out, and refinancing it (to pull the money back out) with a traditional mortgage, at the higher, fixed-up value.   Then taking that money and using it to buy another fixer upper.  The fly in the ointment is qualifying for a mortgage as an entrepreneur.

Banks like to see a history of regular paychecks.  Okay, so how do I make that happen without getting an actual (ugh!) job?

Invent your own job!

So I set up an LLC and made myself the CEO and hired myself as the Project Manager.  Then I contracted with an inexpensive online payroll company to issue my paycheck to me twice a month as an automatic deposit into my personal bank account.  They send me an email each time to remind me to approve payroll and then they deduct the check amount, along with the federal, state, and social security taxes from my business account.  So easy!  So cool!

Update – The payroll company I used is Gusto.com.  They have turned out to be really helpful and I am very happy with them.  If you would like to try them out, here is a link that will get you an Amazon gift certificate for $100 when you sign up and run your first payroll through them: GUSTO

Business Credit

As self-employed entrepreneurs, we sometimes need to make purchases ahead of the income.  When you open your business checking account, you will probably be offered a credit card for your business as well.  This is good because your business credit card does not show up on your personal credit report.  Avoid putting business expenses on your personal credit cards because that lowers your credit score and, at the same time, lowers your chances for qualifying for a mortgage.