Paying cash vs Financing on a Flip
Hey Fam! I need some guidance yet again. Is better to finance a house for a flip or to pay cash? Are there any benefits to either or?
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Hey Javier, Paying cash will save you a good amount of money on fees/interest. Aside from that, you will usually see a discount on the purchase with a cash offer as opposed to financing. The rehab will certainly go quicker using cash as well. When you draw funds for the rehab, you'll have to stop for inspections and wait for funding. You're usually looking at about a week or so for that process. While it doesn't sound like much time, if you submit 4 draw requests, it adds at least a month to your rehab time...that's an extra month in taxes, insurance, maintenance, interest, etc... it starts to add up quick. Time is just as important as the profit in a flip. Don't discount that part of it. Good luck!