Developer · Bellflower, CA · Member since 2019 · 36 posts · 35 votes
First post ever. Lol.
I came across some extra money so I’m going to make an investment out of state very soon.
My question is what kind of advantage do I have buying a house with an all cash offer vs bank financed?
Originally I wanted to finance multiple homes but I feel I can get a better deal by offering an all cash offer. I can always refi up to 75% after I get the home using cash and reuse the 75% on another home. Is this a good strategy to find a good deal?
You can usually get a little bit of a discount as an all cash buyer because you won't have the contingency of having to qualify for the loan and can close quicker. For example, if you offer $5k less with a quicker close dealine than someone who has a financing contingency, they might just go with your offer. But if the financing offer is $10k more, they might just take the contingency and pass on the all cash offer. You also have a big advantage if you wanted to fix up homes, because properties in really bad shape can't get traditional financing. So the BRRRR strategy works well. Good luck!
Yes thank you so much for the advice! It looks like I’d have an advantage buying with cash if the seller is motivated to sell. If he doesn’t want to wait for the financed buyer. I guess I have to wait and see the situation of the seller when I finally find a home to buy.