BiggerPockets

I placed 3 offers in the last month in California, one of them over asking price. Lost all 3 to cash buyers. I'm offering 20-25% down and have an excellent crredit rating. What's a body to do?

Scott that is good...

There are a lot of variables to consider here. What is your exit stratigy? Are you offering on REO's? If you are, go to a local bank and get set up on their portfolio loan program so that you can offer cash. Also you need to offer on a lot more than 3 properties if your bidding on REO's... I do 4 to 5 offers a day and get 1 to 20/25 ratios... You could also get in front of the biggest REO Realtors in your area. Let them know your serious and that you want deals and are ready to spend money... Be honest about what you bring to the table and they will respond... Good luck ...

Welcome to the land of REO investing. Cash is king and it is oh, so true when it comes to REOs.

About two years ago, we learned that lesson pretty quick. If you want the deal, you are going to have to offer cash for REOs.

Even though I'm a novice, I agree that cash is king. Out of the 3 homes we have bought (one yet to close), two of those homes were REO's and our offers were cash and we got them. The third and most recent one we are going to finance and chose to do that with this one because it's an actual owner. Well, it's an estate situation but there wasn't a risk of getting out bid since they accepted our offer and no bank involved. I say definitely see if there is a way as the others have suggested where you can be in a position to offer cash.

Our next REO we'll offer cash and will be able to do that because we are financing this most recent one and keeping the cash in reserve for the next bank owned.

Wow Dustin, 3-4 a day?? I'd be scared to get accepted offers on all of them LOL! But then again we wouldn't be in a position to afford 3-4 at one time. Right now we are just going after one at a time and so far I'd say since we started this we've only put in maybe 6 offers and ended up with accepted offers on 3 (one a non-REO). So not too bad I think :D

Ok....I'll admit one thing that I did that I can't recommend as a practice. One time I made a "cash" offer that 1 day before closing I had to change to a "financed" offer.... Yeah....I was an a-hole and pissed off just about everybody but since they had the whole thing scheduled and everyone was waiting for it to close they went ahead with the closing. Don't make a habit of it and play dumb if you try it (well golly I thought my loan meant you were getting "cash" from the bank). Being "from Indiana" makes it easier to play dumb to "dem big city banks" he he heee.

We used to hit 1 out 3 with agents we have had relationships with. From June until now we've made 300-400 offers and only bought 4 properties (2 over asking price). We are cash buyers.

According the REO agents I know the asset managers do not put a huge advantage on cash offers unless the property is un-financable.

I'd suggest you wait until the winter. I think California is going to see a lot more inventory (but it depends what end of the market you're dealing).

Originally posted by Ross Hair

Hi Nick,

The point about "cash" is it doesn't need to be your cash.

BINGO! Private money, HMLs, lines of credit, whether personal or commercial are considered cash.

It has been very rare that we use our own money, sitting in a money market or checking account to pay for a deal. The few times we have done it is to have funds for a super quick closing.

Originally posted by Tim Wieneke

Ok....I'll admit one thing that I did that I can't recommend as a practice. One time I made a "cash" offer that 1 day before closing I had to change to a "financed" offer.... Yeah....I was an a-hole and pissed off just about everybody but since they had the whole thing scheduled and everyone was waiting for it to close they went ahead with the closing. Don't make a habit of it and play dumb if you try it (well golly I thought my loan meant you were getting "cash" from the bank). Being "from Indiana" makes it easier to play dumb to "dem big city banks" he he heee.

Tim, I can't even tell you how many times we have done that. Luckily, our lender and closing companies can move pretty fast and adjust. That is the great thing about investing in smaller towns. The banks, closing companies and realtors know one another on a first name basis.

As an example...I am just accepting a cash offer 7k lower than an FHA offer. Why you ask....there is nothing more frustrating than having the deal fall apart late in the game. Cash is King

The best little nuggett I can give you is this.. Find 2 to 3 REO realtors and become buddy buddy with them!! This way you can get the inside track on your offers and I promise you.. You will get more offers accepted!! I use some realtors to put some offers in but the majority of the time I call the realtor who has the listing my self and put the offer in with them.. This way they get both sides of the commision.. You close 1 or 2 with them.. They will call you eveytime they get a listing!!

As for cash offers.. Go to your local bank and get a heloc on your primary residence or a different line of credit and that will suffice as a "cash offer"