Cash offers

[Wesley W.]

As I begin my investing career, I've heard more than once that one can get the "deepest discount" on an investment property if it is a cash offer.

Excuse my ignorance, but I don't understand why?

There still has to be a closing, with attorneys for each participant, right? If I'm buying a house the bank I am lending money from is going to write a check to the seller, much like I would if I am paying cash, no?

Does the lending piece delay the closing? In other words, if I am paying cash is the primary advantage the speed of closing? If so, what is the typical time difference between a mortgage closing and cash?

Thanks in advance!

[Pat L.]

We always go CASH ... no conditions, fast close.
(The days of financing for us are long gone.)
But we know the property VERY well before we buy it.
Title work can be a pita, but by that time you have a signed deal & we just blame the attorneys.

Some recent deals...

1. Foreclosed for $58,000. 1700 sq ft ranch, all hardwood floors & cabinets with leaded glass....Sat empty for 5 years. Mold from a roof leak in the back laundry room caused most conv. financing denials.
While viewing the home our agent called the bank in TX & we had a verbal for $21,000 CASH.
We did nothing to it but our new buyer restored it beautifully.

2. Two homes side-by-side. Listed for $79,900 for BOTH, sat for 12 months under contract twice but conv. financing took too long to close. They had a lot of "REHAB 4 $'s' kids looking at them.
Rental income was a low $1000.
We did a VERBAL bid of $53,000 cash or we walk.They came back @ $58,000 & we walked. A week later they agreed to $53K. Re-sold for $63,000 no work done & the new owner bumped the rents to $1300, no complaints.
The Rehabbed home next door is 'listed' for $87,000.

3. Large 3/2&3/3 duplex (built 1830, on a lot 130x823 with a 28x35 barn) on the mkt 18 months. Started @ $89,900, & finally dropped to $59,900 as the heirs (in the family >70 yrs) lost all the tenants. We threw out a VERBAL bid of $40,000 CASH, they said no way. 10 days later they came back @ $45,000 & we took it.
(They refused earlier bids in the mid $50's.)
It's currently being totally gutted. The pocket doors between the dining & living room & the front double doors are 9 ft tall.
The wall studs are hand cut 8" x 4" tree trunks. The brass claw feet of the old bathtub rest on 'crystal' balls.

But they did pull their g/grandfathers1929 Ford auto out of the barn & it had a few bullet holes in it!!!

I love this business.