Smart to offer cash now, then mortgage later?

[Jonathan Saft]

Hi BP community! 

I am researching the smartest ways to buy a new condo or apartment for my mom. With the uncertainty in the market and rising interest rates, my initial thought was to wait 3-6 months to see if either house prices or interest rates start to fall.

After doing some research, however, I am now inclined to start looking more aggressively and prepare to make an all-cash offer without a loan. Then, if and when interest rates start to fall back around the 4-5% range in the next 12-18 months, I can always take out a mortgage at that point and use the cash from that loan to invest in something with a >6% return. 

With this strategy, I would miss out on investing the cash used for the initial house purchase in the short term, but going from a 7% interest rate to a 5% interest rate on a 15 year mortgage would save me over $70k. Plus, I am guessing I would be able to negotiate a better purchase price with the cash offer. Lastly, there is no guarantee right now that even safe investments would provide a positive return over the next 12-18 months.

Am I missing something? This feels like a no brainer move to me, but are there any downsides to making a cash offer now and taking out a mortgage later?

Appreciate any advice or insights. Thanks!