How much of a benefit to BRRR purchasing with cash?

[Eric James]

I'm using the BRRR strategy and trying to figure out how much of an advantage it would be for me to purchase with cash, and then cashout refi after renovations are complete. My alternative is financing with a local bank, that will finance the purchase as well as repair costs (as long as the ARV of the property appraises well) for 20% down.

If I buy with cash I would be able to purchase 1, or possibly 2, properties at a time (I'd be limited by my capital).  If I use financing I could probably manage 4-5 at a time (at various stages of completion).

So, I'm trying to decide how much of an advantage it would be for me to be able to give sellers cash offers and quick closings.  Can anyone provide input on how much of an advantage this might be?  Is there any way to quantify how much of a discount I might be able to purchase properties at if offering the cash/quick closing terms?

[Heidi Wilson]

The best BRRRR properties are going to be competitive situations where terms of the deal are an important lever. I always pay cash first and then refinance. You will never get another chance to create that much equity as with the purchase price. Do everything you can to get the best deal possible and you will reap the rewards later. When the market is less competitive it would be less important but I can say for me in this current market paying cash is super important.