How Do You Beat All Cash Offers?

Question

I see a lot of investors talk about using leverage to acquire properties, etc. But do you ever find it difficult to acquire properties using a mortgage when there are other investors buying all-cash in your area?

Mike McCarthy · Answer

@Paul Scozzari find out what motivates the seller. In many cases, a quick definite close is what they want (this cash is desired).

But other sellers want an extra month to clean out the house, or maybe they don’t want to deal with any repairs. If you present your offer as ‘I noticed there’s some water damage from the bathroom and what looks to be a leaky skylight, other buyers may nickel and dime you after an inspection, I won’t.

I’ve been surprised, a few deals I’ve made it turned out the sellers didn’t really care much whether it was financed or cash. They just wanted the best overall offer.

Frank Wong · Answer

Hi Paul,

You are not going to win those out against cash.  The only way is to be more aggressive on your price and find a lender that can close fast.  My lender in CA closes in 15-17 days for me.  Even with these 2 things its very hard for a seller to not choose a cash offer.

This is a big reason why I pay cash for my investments.  With very few deals available this is the way I can secure and make the purchase.  The properties I like need rehab and probably would not work with a traditional loan anyways.

You can buy cash and then refi out down the road.  That is always an option.