What are your thoughts on buying with cash to be competitive with the offer in a multiple offer scenario and then finance the property immediately after closing to get the cash back? Property needs work, our plan would be to renovate with the funds returned after the financing. Fully aware that we would be at the mercy of the appraisal but trying to think of ways to be competitive to a seller when multiple offers are expected.
I'd make sure you can get financing (eg are approved for that amount) and then if you're willing to take the risk of not being able to pull all of the money out that you expected and the numbers still work, then try it.
Thanks for the reply! I have a preapproval already and have posed this question to my lender but of course I emailed them after hours so I've been working through this in my head and figured I'd reach out for general thoughts.
Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
2y
Hi Ryan,
Is this a flip or a BRRRR? Delayed financing is a common strategy for people who buy cash and later gets it financed. You can do this with both a short-term or a long-term financing.
what you're describing is basically a BRRRR. and you can't 'refinance immediately.' for a DSCR loan, you'll need to wait 3-6 months and conventional, 12 months.
so should you pay all cash just to beat everyone else out, and then hope that the appraisal gets you some of your investment back? no, no, no, no. it either works as a BRRRR or it doesn't.
and if you're buying in all cash you don't need a lender on the buy... you need them on the refi.