BUYING REAL ESTATE WITH CASH

[Julius Clark]

Today's Topic: BUYING REAL ESTATE WITH CASH

There are pros and cons of buying real estate with cash. Like most things in real estate, it depends. Before considering purchasing real estate with cash it is important to consider a couple of things:
- Your financial situation
- Your investment goals
- Your risk tolerance

We often use the phrase "cash is king", but we don't live with kings. Make sure that you elect the proper financing technique by considering the pros and cons.

PROS
- NO MORTGAGE PAYMENTS: This is the biggest advantage of buying a house with cash. You will not have to make monthly mortgage payments, which can save you a lot of money in the long run.
- NO INTEREST PAYMENTS: When you buy a house with cash, you will not have to pay any interest on the loan. This can save thousands of dollars over the life of the loan.
- FASTER CLOSING PROCESS: If is speed is important cash can greatly speed up the process by avoiding underwriting processes needed for other means of funding.

CONS
- LESS LIQUIDITY: When you buy a house with cash, you will have less liquidity than if you had taken out a mortgage. This means that you will have less money available to invest or spend on other things.
- MISSED MORTGAGE TAX DEDUCTIONS: Missed mortgage if you itemize your deductions on your taxes, you may miss out on mortgage interest deductions if you buy a house with cash.
- INVESTMENT RISK: Without typical underwriting processes it is important that buyers do their due diligence to ensure that they are making a good investment decision.

Undergoing such a transaction can be a daunting task. After you go through the process a few times it's just a matter of running the play again. Also make sure not to fall asleep at the wheel and miss a crucial step in the process. If you have never purchased a property with cash make sure to connect with individuals that can help you mitigate your exposure to risk.