Buying a house in new location when doing a business asset purchase

March 27, 2025

by a searcher from Baruch College-The City University of New York - The Zicklin School of Business in Red Bank, NJ, USA

For those who move to buy a business and have a family, do you typically rent in the new location? I would think it is difficult to get a mortgage without documented income (since most people do business asset purchases). If anyone has ideas, curious to know how it would work to buy a home with a mortgage when doing a business asset purchase,

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Reply by an intermediary
from Wake Forest University in Winston-Salem, NC, USA

You hit on an often unspoken challenge faced by relocating buyers -- if they weren't a business owner before, other than a portfolio mortgage (meaning a non-Fannie/Freddie loan that they aren't going to sell on the secondary market) with a lender you have an established relationship, it is very hard to get a mortgage given the rules around being "self employed" which generally require a 1 or 2 year track record. The larger rental property management companies can be equally as challenging as they almost all use credit models now with very little user common-sense input. I had a buyer who had credit score over 800, buying an established business, and cash in the bank to cover the loan, that could not get a mortgage and struggled with finding a place to rent -- they ended up renting from an individual.

Reply by an intermediary
from The College of New Jersey in Princeton, NJ, USA

Ohhh, I feel your pain. I've been in this position before and will be again in just a short few months. I'm basically getting what's called a portfolio mortgage through the bank I've been doing business with for several years. The underwriting criteria is a lot less stringent because they keep the loan in-house. They'll factor in bank accounts, liquid investments, interest/dividend income, etc. which to my understanding, conventional mortgages will not take into account. Happy to make an intro if needed.

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