Cash now offer, how does it work?

Hello all,

After reading some articles from Ron LeGrand, and intensive personal study over the past 3 years on all these subjects, its time to get off the pot.

One tactic that concerns me, is asking a seller “If I paid you cash right now, how much lower would you go?”

My issue is this: How is this accomplished if you don’t have cash on hand in the first place?

My guess is, valuating the property first, both for NOI and Cap Rate; then once the sellers numbers are as low as they can go, control the property, then approach a bank/PL/HML with these numbers for the loan.

This would seem to negate seller financing and put me in a position to seek institutional lending, which of course leads to a down payment; I gather the real way would be to seek private lending or establish a R.E. Syndicate/Group first.

I realize that this is only a tactic, and a strategy should be developed to funnel ‘potentials’ in to it, but its a powerful question to use with a seller and I’d like to see how to put it into play. My guess would be after I have some profits under my belt to provide for down payment.

I’m eager to hear all sage advice…go ahead and shoot as many holes in it as you like…

Um, would someone at least confirm I’m right? Its a little weird seeing so many views, but not one opinion/correction about what I’ve said…

Perhaps you’ve received no responses because your post is a bit confusing. You pose the scenario of offering the seller an all cash deal to get their best price but then state you have no cash and must get financing for the deal. If you are offering an all cash deal then you have to back-up that offer. If as you say you don’t have the cash then welcome to the world of traditional finance. Go to your bank or broker for financing or ask the seller to carry a 1st or 2nd mortgage on the property if they have sufficient equity. The enticement of the all cash offer lies in the fact that there is no financing contingency in the purchase meaning the deal is more likely to close and in a shorter period of time.

I offer cash in 24 hours, but I never pay cash in 24 hours. Cash now is simply a negotiation tactic. If they MUST have all cash, then the price MUST be good enough to borrow HM.

Thank you very much, I had a feeling it was my post. But you confirmed the obvious, that its a tactic, just like anything else.
Thank you too, for showing me how the tactic is actually used.

I’ll do better with future questions here, and apologize for the confusion…