I mainly invest in small multifamily (buy & hold). Lately, several offers I placed got beaten by cash buyers, which honestly made me pause and rethink my strategy. What’s interesting is: I do have enough cash to close deals in cash if I want to — but I’ve always felt it’s not necessary, and possibly not optimal for long-term buy & hold. So I’m genuinely curious and want to learn from people who use cash regularly: • How do cash buyers actually make money?Especially in today’s pricing + rate environment. • Are cash offers typically lower than conventional loan offers?If yes, how much lower is “normal”?2%? 5%? 10%? • For a non-distressed seller (not foreclosure, not REO),does closing 10–15 days faster really matter that much?Or is it mostly a listing-agent preference / perception thing? • For cash buyers who are not flipping —what’s the usual exit strategy? • Buy → hold all-cash? • Or buy → stabilize → cash-out refi? • • If the plan is cash-out refi later: • How much higher are cash-out refi rates compared to purchase loans these days? • Does that still pencil out for buy & hold? • • Buy → hold all-cash? • Or buy → stabilize → cash-out refi? • How much higher are cash-out refi rates compared to purchase loans these days? • Does that still pencil out for buy & hold? Personally, I’ve always underwritten deals assuming long-term hold with financing from day one, so I struggle to see the advantage of deploying large amounts of cash upfront — unless there’s a meaningful discount. Also… 😅 Why are there SO many cash buyers right now? Would love to hear real numbers, real strategies, and real-world experience. Appreciate any insight 🙏

Why are there so many cash buyers? Because we're in an inflationary cycle right now lol. Inflation is; too much liquidity chasing too few goods & services.

Cash is definitely King and a powerful negotiating tool. What I usually do is make two offers: one using flexible terms such as closing as fast as possible or offering a PCOA/seller chooses the closing date whichever is most convenient for the seller, few or no contingencies depending on the situation, with a very aggressive offer price (how aggressive depends on a lot of factors but mostly seller motivation, days on market, existence of other competitive offers, etc.). The second offer is using financing and has all of the normal contingencies. I usually end up at the same purchase price whether they take the cash or the financed option after negotiations during inspection, appraisal etc. but if they take the the cash option it makes for a much cleaner transaction. If you're going to be selling stocks to free up the cash to make cash offers, consider you may have to pay capital gains taxes. Another option is using a margin loan from your stock portfolio to avoid creating a taxable event. And yes it is still called a cash out refinance even though you closed with cash and there is no financing in place, it's still a refi for some reason.

@Ying Tang That's a very good question and pausing and reconsidering your position is not a mistake. I think long term cash buyers are not keeping all the cash until the end of the deal, they are using cash to win the deal (clean close, no appraisal risk, faster timelines) often at a 5-10% discount, then refinancing once the property is stabilized to pull capital back out. I believe combination of private money, 1031 proceeds and investors sitting on dry powder who value certainty and leverage optionality more than maximizing leverage on day one are reasons for the high number of cash buyers at this moment. Good luck!

I THINK “cash” buyers are winning because seller’s want certainty. They don’t want financing to fall through, they don’t want an appraisal to fail and they don’t want to be off market for 30-40 days and then have to re-list and start over. I’m not sure they are getting more than 1-3% off, but they are winning “ties”. You say you are “Being beaten by cash buyers.” So you can tell us. How much higher are you offering than the cash buyers and still losing? I’m truly interested. I also assume they are either downsizing owner occupants or investors that are buying with a line of credit that they then replace with a regular loan after closing. They’re basically the opposite of the “buyer” that wants to put down a $500 EMD without seeing the property and has 5 contingencies.

From what I’ve seen, cash is mainly a tool to reduce seller risk, not necessarily a better long-term strategy. Cash offers usually win because they remove financing and appraisal uncertainty. In practice, cash offers tend to come in ~5–10% lower, but with higher certainty. For non-distressed sellers, the faster close matters less than the confidence the deal will actually close. Many cash buyers still refinance or add leverage after closing rather than hold all-cash long term.

I’m also a fan of stock market for truly passive long term investments. I would first ensure you have your asset allocation well defined in your personal financial plan. That has driven how and what I’m buying or selling. I’m a very small investor and will catch the occasional off market deal but generally purchase MLS listings in need of some work. The reasons I bought my last 2 in cash was both to re-balance my buckets based on my AA which had become TSM-index fund heavy and also to avoid the current mortgage interest rates. They had multiple offers and I went in just under asking. Mine worked out about 1% less than other offers according to my agent.

Love to hear you are considering your AA. Keeping in mind that I am 4 years from retirement I am currently 55% TSM index funds, 35% RE (not counting primary residence) and 10% cash/bond type things. My ideal right now is 65% stocks, 25% RE and 10% cash but a recent property tipped me a bit higher in RE which is ok. If the stock market keeps climbing it will even out relatively quickly and if it tanks I will be happy to have as much in RE which I plan to hold for 10 years anyway. Best wishes with your next offer.

Building on @Alan F. post. During a period of inflation you don’t want to hold cash. It’s losing value. You don’t want to borrow at 7% so you can keep cash in the bank earning 3% if inflation is 3%. In that case the downpayment cash is “earning: 7%. Especially if you can borrow that money at 7% later if you “have” to.

Ok @Ying Tang, apparently I'm going to have to be the "masked magician" as I don't see anyone else actually answering with the truth and reality of things. Generally speaking, the whole "cash buyer" things is smoke and mirrors. It's a pitch to win the deal and get it locked up. The vast majority of them, close with some type of financing. Yup, you'd be right if said "but they said cash offer". And rarely does anyone care as long as it closes. Because fact is ALL purchases are cash at closing. So in reality, for vast majority of time, it's just a perception, or selling a perception, of certainty that the deal will factually close. Funny part is, most have the same contingencies, if not more, that regular financed offers have. Again, just packaged differently, thus selling a perception. Now for the most important bit of advice Ying. You need a different agent representing you, 1,000%. If they were the right agent, you'd have already had this who strategy and tactics discussion with them. And they'd be advising you of the pro's and con's of which way to do things, why and how. That obviously hasn't happened, and that's how I know with certainty, you have an under qualified person in your employ. Now if you, yourself, are the agent doing you own buys, no difference, you hired the wrong person and yes you should 100% hire the RIGHT qualified Pro. Then stay close to the process, ask questions, learn, evolve, and when ready to run the circus yourself, that's when you take the wheel. If you have the cash to offer in cash, close in cash, it's a GIANT missed opportunity that your not tactically buying via presenting either-or offers. My gosh that's such a powerful offer tactic, hell it's your most powerful tool and you haven't even taken it out the case. Shame.

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Ying TangPoster

Buying & Selling Real Estate

Should I use cash to close?

Ying TangPoster

Posted January 12, 2026 13:14

I mainly invest in small multifamily (buy & hold). Lately, several offers I placed got beaten by cash buyers, which honestly made me pause and rethink my strategy.

What’s interesting is: I do have enough cash to close deals in cash if I want to — but I’ve always felt it’s not necessary, and possibly not optimal for long-term buy & hold.

So I’m genuinely curious and want to learn from people who use cash regularly:

How do cash buyers actually make money?
Especially in today’s pricing + rate environment.
Are cash offers typically lower than conventional loan offers?
If yes, how much lower is “normal”?
2%? 5%? 10%?
For a non-distressed seller (not foreclosure, not REO),
does closing 10–15 days faster really matter that much?
Or is it mostly a listing-agent preference / perception thing?
For cash buyers who are not flipping —
what’s the usual exit strategy?

Buy → hold all-cash?
Or buy → stabilize → cash-out refi?

If the plan is cash-out refi later:

How much higher are cash-out refi rates compared to purchase loans these days?
Does that still pencil out for buy & hold?

Personally, I’ve always underwritten deals assuming long-term hold with financing from day one, so I struggle to see the advantage of deploying large amounts of cash upfront — unless there’s a meaningful discount.

Also… 😅

Why are there SO many cash buyers right now?

Would love to hear real numbers, real strategies, and real-world experience.

Appreciate any insight 🙏

Phoenix, Arizona

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