How Self-Employed Buyers Can Still Buy in Southern California

By Josh Painter

Josh Painter is a real estate broker, mortgage broker, and the author of the book Best Version Ever.

If you’re self-employed, working on commission, 1099, or running your own business, you’ve likely been told that buying a home in Southern California is out of reach. However, that’s not necessarily the case. With a few adjustments to the way you qualify, homeownership is still within your grasp.

In Southern California, I work with a variety of business owners, real estate agents, contractors, and gig workers who are navigating the homebuying process. For many of them, traditional mortgage-qualification methods don’t always apply, but with the right strategy, the path to homeownership can still be clear.

Your tax returns matter more than your income deposits. When lenders assess your financial situation, they focus on your net income after deductions, not your gross income or bank deposits. If you’re writing off a significant portion of your income, it can make your earnings look lower than they really are.

Working with your CPA ahead of time to plan your tax strategy can make a big difference in how lenders view your financial picture and help you avoid any surprises down the line.

A two-year work history is typically required, but there’s flexibility. Lenders generally require two years of consistent work history. They’ll average your income from the past two years to ensure stability. However, if your income is on an upward trend or you’ve been in the same field for several years, there’s often some flexibility with this requirement. It’s important to show that your income is steady or improving, which can help you qualify even if your situation doesn’t exactly match traditional guidelines.

Alternative loan options can help you qualify. For many self-employed individuals, traditional loans aren’t the best fit, especially in higher-priced areas like Southern California. Fortunately, there are alternative financing options, including bank statement loans, asset-based loans, and jumbo programs. These allow you to qualify based on cash flow and assets rather than relying on traditional tax return documents. This can be especially helpful if you’re an entrepreneur or have a more unconventional financial situation.

If you’re self-employed or a 1099, you don’t need to write off the idea of homeownership. Instead of making assumptions, reach out and explore the options available to you. The key is working with someone who understands your unique situation and can help you develop a strategy that aligns with your goals.

If you’re ready to find out what you qualify for, contact me at 951-265-3524 or josh@morethanjustarealestateagent.com. I’d love to help you figure out your options and create a plan that works for you. Homeownership in Southern California is possible: you just need to take the first step.