How to come up with all cash offer?

Question

Hi, I'm a newbie to BP and very new to real estate investing. We purchased our first investment/rental property in July with a conventional 25% down, 15 yr loan. We saw another property yesterday that we were interested in purchasing to rent out and was going to follow the same route with the 25% down 15 year loan. We put in an offer a little over asking price and we didn't get it. Property was listed for $160k. Turns out there were 4 other offers, several being all-cash and it went way above asking price. My question is, and it sounds like a stupid question, where do people come up with all this cash? My husband and I both work professional jobs and have decent incomes but it'd take us several years of saving to come up with $160k in cash. Are there just tons of people out there making bookoos of money or are they coming up with it in a creative, nonconventional way I apparently don't know about?

Jeremy Karja · Answer

If you use private money... IE find people who have cash and use theirs and give them a good return.  Us an equity line, home equity line of credit...Heloc, IRAS, hard money etc.  These are all considered cash buyers.  Hope that answers the question.  If you think about that...most people out there have access to at least one of those.

Mindy Bowden · Answer

My question though, is how do you get all that cash? If you were someone like me, not a RE pro, but someone with a regular full-time job, is there another way to get all that cash besides just saving some of your paycheck every period?

Phillip Dwyer · Answer

There's a lot of cash out there now, but there were even more all cash buyers a couple years ago.  In my market, 27% of the sales in the past 30 days were sold to cash buyers.