Buying with Cash

12 Replies

I want to stay really conservative and buy with cash rather than put 20% down. I am not employed right now and it seems impossible or even silly to take on a mortgage. I just want to have an income stream and don't mind that I might earn less. I figure I am balancing out my risk. Just seems a good fit for me. Thoughts?

If you have enough cash to buy out right, you can negotiate a deal. 

Save your cash and put 20% down on 5 homes instead. You'll have much more cash flow quicker.

Welcome to BiggerPockts, Jane. And welcome, Faith.  Faith has a good point, cash can help you buy for less. If things change, you can borrow against the property in the future. 

Can you go into closing with actual cash bills? 

Originally posted by @David A.:

Can you go into closing with actual cash bills? 

 LOL, legally yes, but I doubt if any of the title companies want that risk. They all seem to require wire transfers now. Even cashier's checks are counterfeited too easily with modern printers.

Hard cold cash buyers will use a lawyer here in Texas to close a cash transaction because a title/escrow is like real estate agents they think inside the box because they were taught that way.


Joe Gore

If you're more comfortable paying cash than getting a mortgage then that's what you should do.  Doesn't matter whether you might earn a little more by having mortgages, etc. -- all the money in the world isn't worth not being able to sleep at night because you're worried about your investments.

So, long story short, there's nothing wrong with what you want to do...

Jane are you talking houses, commercial real estate, multifamily??

How much cash without a job do you have to invest?? What is your return expectation per month versus how active or passive you want to be.

Nothing wrong with paying cash but you need to define what type of property and capital requirement is needed versus what you have. Even buying cash you still want reserves for unknown issues that come up. 

@David A.    I do not know of any title companies that will take cash any more as they are under the same guidelines as banks and all with the government CRT requirement when accepting cash

@Joe Gore. 

@Joe Gore   Since a closing attorney is now required to be affiliated with a title company to issue title insurance as of 4-5 years ago, they have the same requirements when title insurance is involved.  There is only one box to think in

512-293-3885

Completely agree with @J Scott - can the argument be made that you could use that cash to leverage more properties and create a better monthly cash flow, sure.  Even if you only used 1/2 of it, bought 3 properties and put rest away to cover "unexpected expenses." 

But in the end, you have to do what you feel comfortable with and what let's you sleep at night.  If that's buying 1 property all cash - then do it. 

Best,

Richard

Originally posted by @Jane1 Yadav:

I want to stay really conservative and buy with cash rather than put 20% down. I am not employed right now and it seems impossible or even silly to take on a mortgage. I just want to have an income stream and don't mind that I might earn less. I figure I am balancing out my risk. Just seems a good fit for me. Thoughts?

 Hi Jane,

Welcome to BP!!

I buy my rental properties cash also. I completely understand that I make lot less buying cash than I can by leveraging, but the peace of mind is invaluable. It absolutely can be done.

Everyone has different expectations for what they want their capital to do, how much money to make. Do what you feel comfortable with.

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