Financing contingencies but using cash

[Krishonda Johnson]

Hello bigger pockets buddies. I'm currently reading "The book on negotiating real estate" by J scott, Mark Ferguson and Carol scott. I had a question about the assignment contract (the contract with wholsaler and seller). One of the contingencies options is financing which allows the wholesaler to back out if they can't get funding from the lender. Now i was wondering if i initially planned to use cash which is going to be what i use once a end buyer is found, am i allowed to just use that contingency in the contract and later change it to a cash offer once i have the funds?

[Ryan Seib]

Yes you can do that. It is not illegal to get financing just because you also have cash. Is it ethical to use that just as an 'escape hatch' if you do not like the deal. I think that is situation dependent and really is a case-by-case analysis. Though I agree on the whole it sort of seems like an unethical pattern. And that can matter legally because some concerned citizens groups and legislators like to try to crack down on what they perceive as unethical business practices to protect the public. Best wishes in buying!