Buy with cash then get a mortgage? Pros/cons (for buy & hold)

[Brian Dickerson]

We have decent chunk of cash ready to invest in our first rental property.   In looking at deals, I see some that we could potentially pay cash for.  The benefits I see are quick closing and possibly getting a better deal because of a cash offer.  However, we'd want to get 75-80% of that money back if we bought with cash, which I understand you can do with a refi.   Is this a sound idea?  What are the possible downsides?

[Ali Boone]

Yep, solid idea, and one of the best ways to go. You're more likely to land a property if you offer cash for it. Just be established with a lender who is licensed in the state you are buying in, preferably an investor-friendly one, and check with them before you buy on anything you need to know about doing the cash-out refi. The real trick is which lender you use. Use the right one, you're in like Flynn. Wrong one, the refi will never happen. For example, the big banks are unlikely your best friends for the cash-out.