How to make offers on cash only properties?

[Kat Malkowski]

I've often heard the phrase, "Find the deal and you'll find the money", but how does one get around putting an offer in on a cash only deal when you personally don't have the cash? Especially in the hot market I'm looking in, low price, cash only properties go under contract pretty quickly. I don't have the luxury of having private investors at the ready for whatever deal comes along since I don't have an established track record yet. I am likely looking to use hard money as my source of funding, but since hard money is usually based on the deal itself, I'm assuming you have to secure a deal before even submitting a request for funds - but do you actually have to something under contract to apply for hard money? Can I apply for hard money using the information for a potential deal that I have not yet made an offer to see if I will be approved for the requested amount, or do you have to be already entered into a contract of said property in order to get approved? Additionally, should I even bother submitting an offer on a property without proof of funds being submitted at the same time, or will the seller likely reject the offer without seeing the cash on hand up front? Also, does money in a 401k count as "cash on hand"? Any advice here is helpful. And that advice might simply be: don't go after cash deals and look for ones that offer financing options.

[Jason D.]

For any loan, you have to have a purchase contract before you can get a loan. You can get a pre-approval, but that's still no guarantee for funding. Most "cash" deals mean you have to have cash in the bank, or at the very least, they wont accept a contract with a financing contingency in it, so you would likely lose any earnest money, or more, if you couldnt close. I would make sure you are not posing as a true cash buyer unless you have cash. It'll come back to bite you at some point.