Making an offer with no hard financing plans

[John Ford]

OK, so a deal came on the market within the last 24hrs that I think I may want to make my first as-an-investor offer on. But...I have no liquid funds. Can I make an offer with financing up in the air? Isn't it customary to put the type of financing I expect to use to close the deal in the contract? What if my financing plans are "take out a HELOC which could take 60 days to close and I very well could ultimately be denied for, blowing up the deal." Is it still worth it to submit an offer?

I am working with an investor-friendly agent but I wanted to ask here before I ask them and look like a fool and have them think "this guy has no clue what he's doing" and kicks me to the curb.

[Chris Mason]

Originally posted by @John Ford:

What if my financing plans are "take out a HELOC which could take 60 days to close and I very well could ultimately be denied for, blowing up the deal." Is it still worth it to submit an offer?

 Well, it's America, so you are free to write the offer. And they are free to throw it in the trash can.

¯\_(ツ)_/¯

John, and this is for the lurkers too: Whoever you are reading this, that means some part of you is interested in real estate. If you have the equity, you almost have what most people that want into REI do not have -- ready access liquid to capital.

Go apply for and open that HELOC now. Keep the balance at $0.00. You will pay some nominal fee, like $75/year, to keep the HELOC open with zero balance. $75/year is nothing, and what it gets you is ready to write an offer the second that killer deal you've been waiting for this whole time crosses your desk. Lurkers, go open that HELOC now. John, go open that HELOC so you don't miss out on the next one.

For people years and years away that are just reading this who like the town they live in and will probably be there for another 5 to 10 years or more, go do the NYT rent vs own calculator, and buy a house for you and your family. 5% down gets you in the door of homeownership and off the rent treadmill, and if you get fortunate with appreciation, there's your REI down payment. Dumb luck with appreciation (sometimes it's more research than dumb luck) paired with a HELOC, believe it or not, is one of the most common ways people get started. HELOC funds can make it a cash purchase, or those HELOC funds can be a big fat 25% down payment paired with a traditional mortgage for 75%. What's 75%+25%? It's 100%. Look, 100% financing. Boom, there's your golden ticket, 100% financing on an investment property. Done. Stop messing around and let this be your call to action. Renters are not eligible for dumb luck (or research) HELOCs.