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Thread: How long did it take you to "get legit"?

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    Veteran Member azaleanola's Avatar
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    Question How long did it take you to "get legit"?

    I want to buy a house, preferably the one I'm currently renting. I've never had a loan or a credit card and have no credit score. When I was much younger I collected disability and food stamps and medicaid. I've also never filed an income tax return.

    So yeah, I know this won't be easy. I've been researching local accountants and lawyers, as well as organizations that help first-time home buyers. I am serious about this and willing to do the work. I know it will likely take years.

    I'd like to hear the success stories/horror stories of SW'ers who have transitioned from living underground to owning their own ground.

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  3. #2
    Banned Melonie's Avatar
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    Default Re: How long did it take you to "get legit"?

    I had problems with a 'less than stellar' credit rating after my divorce ... due to the overdue bills my ex had run up and refused to pay, which in turn fell to me. After paying off those debts, I was approved for a mortgage for my first home ( in the late 90's ) because I had 3 years of tax returns showing steady employment / income as a respiratory therapist, plus enough savings to make a 20% down payment, plus 39 months had passed allowing the overdue bill history to fall off my credit report.

    However, under the tighter lending standards enacted over the past few years, being self-employed, and working in an 'adult' business, the best mortgage financing available carried a high 'subprime' interest rate - despite my having a rather high credit score and spotless credit report. The explanation I got from a prospective lender was that being self-employed in general, and being self-employed in the 'adult' industry in particular, could not provide the mortgage lender with any 'assurance' that the borrower's earnings potential 15 or 30 years down the road would still be sufficient to cover the cost of mortgage payments. As such, the lender considered any such mortgage to involve 'high risk' ... and thus would only be offered at very high interest rates which reflected the elevated future risk of mortgage default once the borrower grew 'too old' to continue earning major money in the 'adult' industry, but 5-10-15 years worth of mortgage payments would still need to be paid.

    As a result of the 'subprime' treatment, I decided to avoid mortgage financing altogether ... so I sold some investments and paid cash for my 'second' house down here way south of the border. I saved a s#!tload on mortgage interest payments in the process.

    Put another way, between 'subprime' treatment of self-employed people, and some US banks now forcibly closing accounts of people / businesses involved in the 'adult' industry as a matter of business policy, dancers and camgirls will never really be considered 'legit' by the financial industry. Access to 'credit' will likely be restricted, and when 'credit' is offered it is likely to be under 'subprime' terms involving high interest rates and high down payment requirements.
    Last edited by Melonie; 10-30-2014 at 08:36 AM.

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    Default Re: How long did it take you to "get legit"?

    If I were you, I would get 2 secured credit cards. File your taxes. Put money in your checking account to pay bills and show proof of income. Also, start putting money in savings. I think you should be able to be approved for a house within 2-3 years.

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    Default Re: How long did it take you to "get legit"?

    https://www.stripperweb.com/forum/sh...-Than-6-Months

    Also, read this thread. It has a lot of very useful info about credit.

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    Banned Melonie's Avatar
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    Default Re: How long did it take you to "get legit"?

    ^^^ unfortunately, where self-employed persons and new mortgage lending regulations are concerned, obtaining a mortgage is significantly more difficult, and significantly more 'expensive' in terms of interest rate and down payment requirement, than it used to be just a few years ago. Having a good credit rating, and a 'clean' credit report, are obviously important. But these are NOT enough, in and of themselves, for a self-employed person to secure mortgage financing these days.

    See and


    (snip)"Under the typical no-income verification loan, a borrower must be self-employed for at least two years and provide proof of sufficient assets and excellent credit (For the few remaining programs, the minimum required score for no income verification is at least 700 - Don't even bother looking for a no income verification loan these days unless you have nearly perfect credit). On the loan application, the borrower either states what their current annual income is now or their estimate for the year. In nearly all cases, borrowers will be required to sign an IRS 4506 form authorizing the lender to check the borrower's income [ via copies of past year IRS Schedule C 'Business Income' filings - sic ], so borrowers really can't make up their income to qualify.

    Because these loans carry a higher risk, the rates are usually about 1/4% to 3% higher than normal loan rates and the down payments depend on credit score. Self-employed borrowers with 700 or higher scores, however, can now get 65% to 70% loan to value financing for purchases and refinance loans on the few remaining no income verification programs. This is a much higher down payment requirement/equity requirement than in 2008 and before, when borrowers could put down as little as 5% with a no income verification loan. [ stated differently, a 30-35% down payment requirement, plus closing costs - sic ] It can appear that these loans would be perfect for the self-employed, but several catches in the program can prevent approval or come back to haunt the borrower later.(snip)


    By 'haunting the borrower later' the author is referring to the fact that most self-employed dancers and camgirls are going to have difficulty attempting to apply for mortgages with terms beyond 15 years, because, unlike other types of self-employment, the career length of a dancer or camgirl is unlikely to actually extend beyond 15 years. 15 year mortgages obviously require higher monthly payments, thus higher levels of reported income are required for mortgage approval on the same price level home. The exception, of course, would be dancers or camgirls who also have an 'in demand' college degree ( like RN or other STEM ) thus reasonable probability of transitioning into a high paying 'straight' job after they 'retire' from dancing or camming. But, recently at least, it is likely that the best mortgage terms which will be offered to most self-employed dancers and camgirls will be 5/1 or 7/1 Adjustable Rate Mortgages ...


    (snip)Unfortunately, since the credit crisis of 2007 to 2008 the rates on these programs have increased substantially as compared with standard full income verification fixed rates. Most lenders only offer portfolio adjustable rate loans such as 5/1 and 7/1 programs. Self-employed borrowers can take these loans out to buy the home they want now, then refinance when their improved financial records enable them to switch to a lower-rate, full documentation loan.(snip)


    ... which falls under the 'haunt the borrower later' heading because dancers and camgirls seeking to refinance 5-7 years down the road are likely to have a difficult time proving to a new mortgage lender that they have a 'post-retirement' source of income that is sufficiently high to fund future mortgage payments. Inability to secure affordable mortgage refinancing may place the homeowner dancer or camgirl in a situation of facing significant increases in monthly payments under their existing mortgage ( due to ARM interest rate resets at the 5 or 7 year point ) at the same time she is facing decreased earnings potential after 'retiring' from dancing or camming. This could easily translate into a mortgage default, foreclosure and forced sale, loss of homeowner equity ( = down payment money + 5 to 7 years worth of payments against loan principal ), and a potential 'deficiency judgment' on top of that if the forced sale price received for the home is inadequate to cover the outstanding loan balance.

    The available mortgage terms discussed in the above snippet are more or less what I discovered myself when I looked to purchase a second ( way south of the border ) home in 2011. The terms and interest rate I was offered were a bit better, partly due to my credit score and credit report, but more importantly due to the fact that I also owned a fully paid for first home in NY plus other investment assets with significantly higher 'value' than the property I was looking for mortgage financing on - assets which could potentially be pledged as collateral to 'guarantee' the new mortgage. I opted not to do this, and instead sold off enough of those investment assets to simply buy the new house outright.
    Last edited by Melonie; 10-30-2014 at 01:53 PM.

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    Default Re: How long did it take you to "get legit"?

    melonie, any job can be considered high risk. I think as a dancer if we get laid off we have a much easier time finding another club in seconds. Where a person who gets laid off in a vanilla job could be out of work for years and that's cosistent with what happened in 2007-8 when 1 in 4 homes were in foreclosure in many states. Actually were I am banks have loosened lending qualificatins and I can only speak from my own dealings with mortgage companies since I've owned mutiple homes for years. Also it's become much easier to get car loans as well. Believe me my mother couldn't get one for nothing a few years ago and she got one 5 months ago with a 380 credit score. just start filling your taxes. ( I cannot believe so many girls here don't file at all) I'm hoping you have only been dancing a few years and had a regular job before to explain your situation? Anyways. That's important and deposit what you claim into an account. If you buy a home thy need to make sure that moneys been there at least 6 months. the longer the better. Also, I have no idea what your credit looks like but work on that. It just amazes me girls on here don't pay taxes or even file and want to magically buy a house? I just don't get it. But anyways good luck.

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    Default Re: How long did it take you to "get legit"?

    I had three years of tax returns from stripping only and one year of half stripping and half vanilla job when I got a mortgage for my first house. I did use the company credit union for that mortgage, so it was a little easier. I've bought and sold houses since then with no trouble. I bought my business with money I had saved from working in the VC world and an angel investor and we assumed some existing debt of the business. Debt that I refinanced this summer at a new much lower rate. I also refinanced my house a year ago. That was a lot of work due to the fact that I'm a business owner and not an employee.

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    Default Re: How long did it take you to "get legit"?

    @michele in particular

    I've only been dancing on-and-off since '06, and most of my other jobs have been under the table gigs bartending or doing bike delivery. I've never filed because I was always afraid of doing it wrong and didn't want to draw attention to myself until I had a reason to (and could afford an accountant and/or a lawyer). My city is heavily dependent on the service/tourism industry, much of which is off-the-books, and there are several local CPAs who specialize in underground service industry workers. I know I'll have to hire the right person to help me work out a settlement for a lifetime of back taxes. I don't expect any magic; I was asking for y'all's success stories because I know this will be hard.
    Last edited by azaleanola; 10-30-2014 at 11:18 PM.

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    Default Re: How long did it take you to "get legit"?

    Also it's become much easier to get car loans as well
    This is true, but it's definitely a 'special case' situation ... stemming from car companies 'owning' their own financing companies and providing 'vendor' funding for loans used to purchase their own brands, stemming from speculative investors providing the funding for auto loans via high interest paying bond purchases, etc. The main reasons these are possible is the ability to charge high enough interest rates for the lenders to still turn a profit in spite of a high percentage of auto loan defaults, and the ability to repo and resell the vehicle into an 'active' market ( ( even if that market is 100+ miles away ) at an 'acceptable' price without significant legal costs or delays. And there's also an issue of the 'affordability' of monthly auto loan payments even when high interest rates are charged i.e. $350 versus $300 a month isn't a huge factor for a working class car buyer.

    Where defaulted home mortgages are concerned, new laws allow defaulted borrowers to forestall foreclosure for months or years ... with each passing month resulting in growing 'losses' for the lender due to unpaid monthly payments plus neglected home maintenance. Where defaulted mortgages are concerned, the ability to resell a foreclosed property is tied to local real estate market conditions / demand ... which in some areas may be depressed and illiquid. And rather than backing home mortgage financing, speculative investors are actually purchasing the properties themselves and renting them out. And due to the much higher average loan balance and much longer terms of loans on homes versus cars, the 'affordability' of monthly mortgage payments can quickly vanish when high interest rates are charged, i.e. $1500 versus $1000 a month may cause financial 'ruin' for a working class person.
    Last edited by Melonie; 10-31-2014 at 03:44 AM.

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    Default Re: How long did it take you to "get legit"?

    I have great news

    the dancer that I have been renting to own a home for the last 2 years will be paying off at home by the end of 2014

    it was a five-year deal started in May 2012 it also involves her renovating the house and she's completed the renovations and be completed her payments almost 2 years early

    I am so happy I'm proud of her although I will miss the thousand dollars a month lol

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    Default Re: How long did it take you to "get legit"?

    ^^^ Thank YOU for choosing to provide this girl with the 'vendor' financing necessary to allow her to become a homeowner. While common with car loans, 'vendor' financing is quite rare for real estate these days.

    I'm also glad to hear that you didn't have to deal with any of the inherent 'risk factors' turning against you ... i.e. the rent-to-own tenant could have stopped making mortgage payments thus forcing you to spend money on eviction proceedings - as well as costing you many months worth of lost monthly payment revenues while the tenant continued to live in your house. The rent-to-own tenant could have neglected to maintain the property - potentially 'sticking' you with additional 'losses' in the form of unexpected maintenance expenses, etc.

    My point of course is that neither banks nor speculative investors would have been willing to assume the 'risk factors' which you took on when you originally agreed to offer private rent-to-own financing. Generally speaking, banks want to transfer those 'risk factors' to US taxpayers ( via Fannie / Freddie / FHA ), and speculative investors want to transfer those risk factors to ( secondary market ) bond buyers. And in order to transfer those 'risk factors', the prospective mortgage borrowers must provide verifiable documentation regarding past ( and probable future ) income, past credit history etc.
    Last edited by Melonie; 10-31-2014 at 07:55 AM.

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    Default Re: How long did it take you to "get legit"?

    I am happy to do similar deals with dancers who can provide industry or other references camgirls entertainers of all types

    our rto clients are residential tenants which in Pennsylvania means a 30 day eviction proceeding but very often in our to properties we have a shorter time frame called for in the agreement

    I also have lenders that work as low as 500 credit score and all payments are made to a third party company that makes positive reporting to credit agencies for every rent or loan payment made

    you are right this is a risky Enterprise for many landlords however since our company name is good people good homes we feel it is part of our mission also to be honest rent to own is a high return on investment and low stress ie no maintenance calls portion of our enterprise

    we do this work in many states and regions throughout the country and to a small extent the world eviction proceedings are a deciding factor very often but those can always be counteracted by a large down payment on the part of the borrower we do quarterly inspections of the units to make sure that they are being maintained properly and if a unit needs maintenance the tenant has x days to resolve the issue

    investors make 10 to 15% returns on their money secured by real estate that is consistently being improved by the tenants who live there my tenants improve their credit score with every payment and properties are brought out of foreclosure and former abandoned every time

    we very much encourage our clients to get their own financing as soon as possible we don't want to be a long term lending solution we look at ourselves as a 2 to 5 year stopgap solution

    and yes it is a risk however no more of a risk than renting to a residential tenant in the state in question

    well you get the credit necessary and are paying down
    so that when you go to get financed you have a great loan to value position to offer the lender

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    Default Re: How long did it take you to "get legit"?

    for those with a little extra money to spend we can get you in on this investment for as little as $5000

    you make 10 to 15 percent return and you help someone who couldn't get a loan otherwise get home

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    Default Re: How long did it take you to "get legit"?

    ^ What percentage rate do you charge them?

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    Banned Melonie's Avatar
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    Default Re: How long did it take you to "get legit"?

    ^^^ what's the 'downside risk' associated with those $5000 increment 'real estate bond' purchases ?

    I would assume that part of those relatively high 'returns' are based on markup of the home's sale vs purchase price, with another part stemming from interest charges ???

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    Default Re: How long did it take you to "get legit"?

    the biggest risk is in the class of the asset

    5000 dollars can buy you a mobile home but you can rent to own to someone for $15,000 over say 10 years

    or it can buy you usually part of a renovated traditional sticks and bricks property which would be paid off in a smaller amount of time

    obviously normal traditional homes that is where you're getting part of a renovated property you are getting a lien position on an actual home with land

    in a mobile home world you are not getting the land

    so well a mobile loan that it is effectively a vehicle asset and well it definitely has value it has less liquid value and more rent to own value

    there are fewer people ready to lay down cash in a lump sum to buy a mobile home and it is harder to find a finance company to buy you out of your note arrangement on a mobile home then if you owned say a 1 , 2 or multifamily house

    i buy mobiles understanding that I will never sell the note I will primarily hang on and take the $300 a month for 10 years

    Though my nortgage originator can write notes we can resell...notes with dirt always win

    in all cases the tenant buyers are just that tenants and they gained no equity through the transaction if they sell out and month 59 of a 60 month transaction they lose everything invested so far in some ways you almost hope they fail

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    Default Re: How long did it take you to "get legit"?

    ^^^ I was talking with a business acquaintance about mobile home related investments. He's actually involved in partnership shares of mobile home parks ... but not mobile homes themselves. His reasoning is that the parks constitute a potentially appreciating 'business' asset, where income / loss risk is diversified over dozens of separate mobile home 'tenants'. As you pointed out, he views actual ownership of individual mobile homes to be excessively risky, since income / loss risk is based on a single 'tenant', since the resale value of mobile homes depreciates rapidly, since state and local laws may effectively render mobile homes 'worthless' after they become X number of years old and are no longer allowed to be moved using public highways etc.

    However, my business acquaintance did point out that employing a 'rent to own' structure does allow the owner to charge de-facto interest rates which are above the limits set under state 'usury' laws, which compensates the owner for the high risk. My business acquaintance further points out that people who agree to enter into 'rent to own' arrangements are probably very willing to pay very high de-facto interest rates ... since their 'conventional' financing options are likely to be extremely limited. My acquaintance applies the same principle to mobile home park 'tenants' ... who are very willing to pay relatively high de-facto 'lot rent' payments because their 'conventional' rental options are also likely to be extremely limited.

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    Default Re: How long did it take you to "get legit"?

    exactly all of my rent to own properties are based on typically a 15% annual interest rate + in the case of mobiles I actually triple what the unit cost me

    For example if the mobile home cost me 5000 dollars to buy and fix then I'm probably selling it for 15 or 16 plus an interest rate of 15%

    now since some buyers are more savvy they don't want to see 15 percent then fine I drop the right to 84 sent and extended the term so that my return is still substantial

    owning dirt is always preferable to owning metal owning both is best I actually entered into my own rent to own agreement today to buy an 18 acre parcel with a 35 spot mobile home park on it

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    Default Re: How long did it take you to "get legit"?

    although usually for dancers and entertainers I will drop that rate to 8 or 10 percent because having spent so much time as a photographer of dancers I understand the job and I'm willing to take a little from my profit

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    Default Re: How long did it take you to "get legit"?

    Quote Originally Posted by pinups4 View Post
    exactly all of my rent to own properties are based on typically a 15% annual interest rate + in the case of mobiles I actually triple what the unit cost me

    For example if the mobile home cost me 5000 dollars to buy and fix then I'm probably selling it for 15 or 16 plus an interest rate of 15%

    now since some buyers are more savvy they don't want to see 15 percent then fine I drop the right to 84 sent and extended the term so that my return is still substantial

    owning dirt is always preferable to owning metal owning both is best I actually entered into my own rent to own agreement today to buy an 18 acre parcel with a 35 spot mobile home park on it
    You should come to Florida. My mom bought a mobile in a prime location across from a very nice mall for 1000. Here though since most owners opt not to buy the land a company can come in and give the park like nothing for their homes and tear the park down and build luxury condos in their place. Can't this happen there too?

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    Default Re: How long did it take you to "get legit"?

    That sounds like fun!

    I guess it could, but in my particular area it won't...the real estate market isn't as volatile here (an upswing in most markets is going on now) and most parks aren't in the best towns (but often in great school districts)

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