As new as it gets, I am. I read thru about 6 pages of discussion but haven’t located this topic, so I’ll ask.
There are many cash investors found all over the internet. They claim they will buy a property for cash in days. Am I missing something here, wouldn’t I be smart to place a straight option on a property and then contact one of these organizations and get the deal done. I realize the margine may indeed be small propably very small. But my thinking is to get my feet wet and get some cash moving in my bank account. Help me out.
If an investor is buying for cash, they are doing so only if the seller is willing to discount the heck out of the property. If you are buying for terms, an option for example, your discount probably won’t be as great. Doesn’t mean it’s a bad approach, just a different one.
On the other hand, an option is risk free. Buying for cash is risking all that cash.
When I was in Louisiana, we would buy at a discount for cash + quick close, fix up, put a renter in, and refi @80% based on a new appraisal and the income proven by the rental contract. This would give us 95-103% of our cash back and allow us to start the next one. While we were rehabbing, our holding costs were significantly reduced.