Leverage Your W2 to Achieve Financial Freedom Quicker

November 24th, 2020

At MartelTurnkey, we believe that the quickest way to ensure happiness, independence, and continued financial success is to find a way to achieve financial freedom. That’s why we’re so passionate about helping our clients purchase turnkey rentals. By purchasing a turnkey rental, you’re giving yourself the opportunity to achieve financial freedom and generate passive income from a property that requires little to no maintenance on your part. It’s important to note, however, that in order to buy your first turnkey rental or your first investment property, you’re going to have to work with a lender. Traditional lenders such as Fannie Mae provide investors with a stable source of liquidity for mortgage lending, which “supports greater access to affordable home and rental housing finance in all markets, at all times” (Fannie Mae). In order to secure such a loan, however, you will need to have proof of income. And, the easiest way to do this is to present your W2 to a lender. Because using a W2 is the easiest and surest way to secure a loan, MartelTurnkey encourages all of our clients who do have a full-time job to keep that job before they decide to pursue a full-time career in real estate investment. By using your W2 to leverage financing, investors will be able to achieve financial freedom faster.


Preparing to purchase an investment property takes commitment, research, and patience. However, owning an investment property is well worth the hassle. At MartelTurnkey, we help our clients secure loans for their properties that they then use to purchase turnkey rentals with. And, as stated above, leveraging your W2 in order to secure a loan is the easiest way to get started in your investment journey. That being said however, it’s common nowadays for people to have non-traditional income that doesn’t fall into the W2 category. For instance, freelancers who work in what is referred to as the “gig economy”, business owners who take draws instead of paychecks, and people who are retired or have independent sources of wealth unfortunately won’t have a W2 to present to a lender. In these specific cases, investors are able to rely on their tax returns or, in some states, a Bank Statement Loan Program that looks – not at your W2s – but at your bank deposits for the last 12 to 24 months (CBC National Bank Coverage). Although these options are available for those without W2’s, relying on tax returns or the possibility of a bank’s Statement Loan Program may not always guarantee you a loan. That’s why, at MartelTurnkey, we encourage all of our clients who do have a full-time job to keep that job before they decide to pursue a full-time career in real estate investment. Quitting a full time job leaves potential investors without a proof of income, and in turn, they almost always have a much harder time securing a loan. As soon as you leave that day job and you don’t have those paystubs coming in, it becomes much harder to get financing.


If you do still have a full-time job, we suggest looking for a lender who will work with you in order to grow a scalable portfolio. Conventional lenders such as Fannie Mae allow you to use conventional financing on your first ten properties. That means that you’ll be able to take out ten loans on ten different properties. And, the good news is that if you get your first investment property using your W2, then properties two through ten will be even easier to secure loans for. The additional benefit of being able to take up to ten loans out at once is that you’ll be able to use the cash flow from your other properties to pay off one of your loans. So, for instance, if you have loans out on ten homes, you would be able to use the cash flow from those homes to pay off one property, and then secure one more property with conventional financing. After your first ten properties, you can start thinking about using hard money, asset-based lending, private lenders, or other creative financing deals to purchase future investment properties. However, if your W2 worked to secure your first loan, we recommend sticking with this type of lending. As the popular saying goes: if it ain’t broke, don’t fix it. 


So, what do you do once you do secure your first loan? We suggest getting started by buying a turnkey rental, or doing your first BRRR project out of state. That’s because these two options are relatively affordable, and will provide you with a stream of passive income, all while allowing you to keep your full time job. For those investors who are looking to scale their portfolios as quickly as possible, we still suggest using your W2 as leverage, especially on the first ten properties you purchase. We do not recommend using asset-based lending or hard cash lenders for single-family homes. For larger, multi-family homes these other methods are almost a necessity. Because of the more complicated nature of these loans, however, we suggest focusing on securing your first ten rentals with your W2 and then working on a plan to purchase a multi-family home after that. 


The biggest mistake we see people who get into real estate investing make is that they leave their full-time job to pursue a real estate investing career. We know how exciting it can be to begin your real estate journey, however, it’s incredibly important to make sure you have all of your affairs in order and enough proof of income to make this happen. By forgoing your W2, you’re leaving yourself in a much more difficult position, as your odds of securing a traditional loan immediately become much harder. If you are interested in learning more about our investment opportunities or are ready to begin growing your investment portfolio, don’t hesitate to contact us at info@martelturnkey.com 


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