when it comes to refinance do the small banks and credit unions just look at the property and what it’s doing? or me as well? If yes wouldn’t I have the same issue I have now?
Originally posted by
@Aaron W.:
@Sarah Jane I paid cash for my first couple of properties then refinanced them later.
There are advantages and disadvantages to cash versus financing.
The most common advantage with financing is you can leverage your cash and buy more properties. However, you can overleverage and run into trouble if you suddenly run higher than normal vacancies or tenants unable to pay rents, and unable to pay the mortgage.
With cash, you don't have to worry about paying the mortgage. However, your cash may not be efficiently used.
Going with private financing can cost a little more but it does still allow you to leverage your cash, if that is your goal. In the long run, the higher interests and fees could be a wash if you find the right investment properties to buy.
By paying in cash, there is the delayed financing route you could take and potentially pull out your money without the typical 6-month seasoning period. However, you still need to be able to qualify for a loan.
In short, you will have to determine how you want your cash utilized. Do you want to leverage and leave the extra for additional properties or an emergency fund, or use the cash to purchase the property?
Good luck!
