Cave Creek is not a subdivision, it is a town, and that distinction is the whole underwriting story. Parcels run from under an acre to many acres. Some are on municipal water, plenty are on a private or shared well. Septic is common. Homes are frequently custom, built across four decades, with no two alike within a mile.
Layer a self-employed income file on top of that and you have two independent sources of delay in one transaction. Most lenders handle the first and discover the second in week four.
How an underwriter rebuilds your income
Two years of filed returns, run through Fannie Mae Form 1084 or Freddie Mac Form 91. Not revenue. Not your profit and loss statement.
- Schedule C: net profit from line 31, plus depreciation, depletion and business use of home added back, minus non-recurring income, divided by 24.
- 1120S and K-1: your W-2 wage from the entity counts. K-1 ordinary income counts only where distributions are documented and the business has the liquidity to keep paying them.
- 1065 and K-1: the same analysis, with guaranteed payments included.
- Schedule E: rental net income with depreciation, taxes, insurance, interest and association dues added back where allowed, then full PITIA subtracted.
Every dollar of aggressive deduction saves tax at your marginal rate and costs roughly four to five dollars of buying power. And a year two lower than year one generally becomes your qualifying income rather than the average of the two.
What the Cave Creek parcel adds
Private wells are an underwriting item, not a formality. Where a parcel is served by a well rather than a municipal connection, expect documentation of the well itself, potability and in some cases flow testing, and real scrutiny of any shared well agreement. A shared well serving several parcels needs a recorded agreement that satisfies the investor, and not every investor accepts every agreement. This is the single most common reason a Cave Creek file slows down.
Septic carries a transfer inspection. Arizona requires an inspection of an on-site wastewater system at transfer of ownership, with a report and a transfer of the discharge authorization. It takes time, it occasionally finds something expensive, and it belongs on the calendar from day one rather than week three. See The Arizona Septic Transfer Inspection.
Acreage complicates the appraisal. A large parcel needs comparable sales with similar acreage and similar improvements. In a market where few of those close in a year, the comp set stretches geographically and the adjustments grow. Some programs also limit the share of total value they will lend against land rather than improvements, which can matter on a parcel where the dirt is a large fraction of the price.
Custom homes transact infrequently. That is appraisal risk with a closing date attached. Order early and decide in advance what happens on a short value.
Horse property is its own category. Barns, arenas, stalls and corrals contribute little or nothing to appraised value on most programs, even when they contributed a great deal to the price. A buyer paying for equestrian improvements should understand they are frequently paying cash for them in effect, because the loan will be sized off a value that largely ignores them.
Association obligations vary wildly. Some Cave Creek parcels sit in gated communities with layered dues. Many have no association at all. That difference is worth real purchasing power on your debt-to-income ratio. Confirm for the specific address rather than the area.
When the returns do not support the purchase
Take conventional or agency jumbo financing if your returns support it. Nearly always the cheapest money available. When they do not, nothing below is a shortcut around qualifying. Each option proves repayment capacity differently and prices differently than agency financing.
Bank statement. Twelve or twenty four months of business or personal deposits with an expense factor applied. Transfers between your own accounts are stripped out of the calculation. See How Bank Statement Income Is Calculated.
Asset depletion. Qualifying income derived from verified liquid assets rather than earnings. Retirement accounts typically discounted, pledged assets generally excluded. See Asset Depletion Loans.
No-ratio. No debt-to-income test at all. Credit, assets, reserves and the property carry the file. I have closed these when several other lenders could not make the math work.
One caution specific to this area: not every non-QM investor will lend on a parcel with a private well, a shared well agreement, substantial acreage or significant equestrian improvements. Combining an unusual income structure with an unusual property narrows the field considerably. Raise both on the first call rather than discovering the overlap in week four.
Before you write in Cave Creek
- Ask whether the parcel is on a well or a municipal connection, and whether a shared well agreement exists. If it does, get a copy.
- Ask about the septic system and put the transfer inspection on the calendar immediately.
- Ask how many associations bill the address, if any.
- Ask what the equestrian improvements are worth to an appraiser, which is usually less than they cost.
- Count your reserves the way a lender will: after closing, at the applicable discount, excluding business funds you cannot document access to.
- Get your CPA and your lender in one conversation before the qualifying returns are filed.
- Get fully underwritten, not pre-qualified. A pre-qualification is a calculator. An underwritten pre-approval means a human read your returns and K-1s.
Why bring this file to us
- We read the documents ourselves, rather than handing them to a processor and waiting.
- Broker model. An unusual file needs multiple investors, not one bank's shelf.
- The full toolkit, agency and jumbo through bank statement, asset depletion, DSCR and no-ratio non-QM.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending, NMLS #173141, lending in Arizona since 1999 and a 2025 Presidents Club Winner at CMG Home Loans. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
Send me the file before you write an offer, and I will tell you what it actually supports.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Program guidelines, eligibility requirements and documentation standards vary by investor and change over time. Rates, terms and program guidelines change and depend on credit approval, property appraisal and other qualifying factors. Not all applicants will qualify. Non-QM financing carries different pricing and terms than agency financing. Consult your tax advisor regarding your own situation.
Looking at a specific home? Send me the address and I will run the numbers: rickykhamis.com/analyze
