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Updated about 7 years ago on . Most recent reply

Cash vs Mortgage question
Hi All,
I have just started out on my RE journey and have 2 properties. One turnkey and one other SFR. Both of these properties are financed with a conventional loan at 25% down. I have a question about financing.
Say I’m looking at a 150K property. If I have the cash upfront to do an all cash deal, do you think that is better than doing the deal with a conventional mortgage upfront? My thought behind this is that once I make the purchase I can then pull out the money through a mortgage after the sale. Also, this would give me an advantage during the purchase by offering the seller all-cash and therefore a faster closing as well as the potential to make an offer without the mortgage contingency and potentially get a better deal that way. I have very good credit so I’m not worried that I wouldn’t get a mortgage.
What are the downsides to this approach?
Do any of you use this strategy?
Thank you for all your help.
ASH
Most Popular Reply

@Ashish Khera, you could give each Seller two options: All cash "tomorrow" for at least 10% off your alternate offer; or, two month closing at that higher (leveraged) offer.
If you're chasing highly motivated Sellers (if not, why not?), that "tomorrow" offer may be extremely attractive to them - even if you ask for more than 10% off your other price!...