Delayed Financing/Cash Offer Approach

[Josh Starner]

As we continue to see hotter and hotter real estate markets it is important to try and make your offer stand out and be chosen even if it's not the highest. Many offers I am seeing are waiving inspections which I do not recommend. One technique I just deployed this past week was delayed financing on an STR vacation property. The owner was motivated to sell and did not want to get into issues with appraisal shortfalls or a longer close as housing prices in the area have skyrocketed as they have in many vacation areas. I was able to beat out other higher offers than my own by going with an all cash quick close offer. I have already begun the refinance process with my lender who will allow me to take out 80% of the appraised value within 30 days of closing on the deal. This allows for a quick turnaround in getting my capital back so I can move onto the next and put me in first position bidding as it was an all cash offer. This is a Debt Service Coverage Ratio Loan and will be looking at long term rent comps as part of the underwriting. While cash offers aren't for everyone, consider it if you have the capital as I have been out bid on multiple properties putting together traditional 20 - 25% offers. The cost of financing doing a delayed DSCR loan ended up being the same as if I had financed it as part of the purchase and helped me secure a turn key Air BNB property. Best of luck to you all.

Regards, 

Josh