7 Tips To Follow To Get Cash At Closing Through REI

In the 1980s, when I started my journey in real estate investing, one of the things I noticed is that it was common knowledge that you’d walk away from a deal with cash at closing.

But, what exactly is cash at closing?

Well, it basically means that when you’re setting up a deal, you’re aiming to purchase an investment in property while receiving extra cash for the unforeseen expenses on the new purchase and/or your cash reserve.

How do you actually get it at closing?

Over the years, I’ve composed and altered a list of the most popular things to do that I’ve personally tested to get cash at the closing of a deal:

1. Wholesaling - One of the most commonly known strategies when looking to get cash at closing. This is where an investor will make money through the process of purchasing the property and turning around to sell it at a higher price. Typically this process is done on the same day through a double closing or an assignment of sale contract.

With the assignment of a sale contract, you usually don’t end up closing on a deal with a double closing. You simply assign the contract over to another end buyer, tenant, or whoever is looking to purchase the property.

You may also assign contracts as well as Options and Lease Options.

1. Rents and Deposits - When purchasing a home for the buy and hold strategy (rentals), you always want to ask the title company to give you your check separately for the rent and deposits that you’re supposed to receive. This way nothing gets “absorbed” in offsetting the closing costs. From there, you can start negotiating the closing costs and fees to a lower price.

Additionally, you’ll know you set up your contract correctly if you’ve asked in the purchase contract with your seller to put aside a set amount to go towards the closing costs (this is as much as allowed by the lender, if you’re financing).

1. Lease Options - Whenever you’re using the route of lease options, be sure to remember to ask for a deposit. If you end up wholesaling the lease option, you have more flexibility and can split the deposit with the owner.
2. “Subject To” - Using this strategy allows you to have the seller pay the investor to take over the payments - Yes! This is totally possible (and practiced frequently) allowing for a win-win situation. This allows the seller to walk away from the property while keeping a good credit and gives you money (which equals about 3-6 months of mortgage payments) for taking care of the seller’s problem.
3. Selling a Note - If you end up wholesaling a property, try to keep in mind you have the option to “create” and attach a note without owning the actual home. You can then sell the note at closing to another investor. For example, you set up a note to assist with the down payment from the end buyer, which is a portion of the profit you make after you pay the seller. This allows you to help sell the property faster while creating residual passive income from the wholesale or by selling the note to an investor for immediate cash. It’s a very interesting strategy, that I’ve had for many years and know it creates thousands of dollars a month in residual income taken from a 2nd mortgage on the home that was sold through wholesaling.
4. Cash Rebates - Cash rebates can be obtained from either the real estate agents and title companies you end up working with.

One of the main reasons investors don’t get cash at closing is for the simple fact that they don’t ask or expect for it to happen in their situation.

Once you set up the deal a certain way, as long as you’re not afraid, it will and can happen. Investors originally structure their deals so that they can get cash back at closing and create a win-win scenario for themselves and who they’re working with.