Trying to compete with cash buyers

[Traci Cameron]

I keep finding incredible properties and have been preapproved for a fix and flip type loan (with 20% down) but can’t get any offers accepted! My realtor (who works with other investors in my area as well) told me that though I shouldn’t give up, it’s extremely difficult to get an offer accepted on a great flip property because the other investors around here are cash buyers. Any advice?? I asked my realtor about the idea of trying to partner up with another investor who’s a cash buyer and I could provide the renovation money. She said that too could be a challenge because of the competitive market here. Am I fooling myself to think others would want to work cooperatively versus competitively?

[JD Martin]

If you are using financing, you need to have something better to offer to the seller who is looking at a cash offer. A grand or two wouldn't sway me in your favor if the other guy had a healthy bank account and his checkbook ready. I've beat several financing offers before because I've done cash. Two approaches, other than finding some other people in which you can join forces to come up with cash, is to either offer substantially more than the cash offer, or operate in zones that filter out most of the cash buyers. If you are looking at the tail end of markets, that's where you're going to be competing with cash buyers.