Читать книгу Flipping Houses For Dummies - Ralph R. Roberts - Страница 65

Whether you’re buying a home to live in or to flip, cash is king. It enables you to pounce on a bargain and gives you leverage in negotiating the price you ultimately pay for a property. When you place an offer on a house, and other bids come in, the seller is more likely to accept your offer of thousands of dollars less when you have the cash on hand to quickly close the deal. Why? Because people bidding against you for the same property may need to make their offers contingent upon receiving financing (a loan). If the seller accepts the offer, those other “buyers” can tie up the property for months and then back out at the last minute because their financing fell through.

The seller must then place the house back on the market and start from scratch. Perhaps the deal on the house the seller planned to purchase will fall through as a result or they’ll end up having to make payments on two houses until the old one sells. They may even have to put off their plans to move, or they may be forced to move and leave the house behind, hoping their real estate agent finds a new buyer soon. Many sellers would prefer to accept a much lower cash offer with the assurance that the deal will close.

When I say you need to make a cash offer, I’m not advising you to carry around a duffle bag stuffed with $100 bills. A copy of one or more recent bank statements showing that you have the money in your account or a letter from your bank’s manager showing your liquidity — the amount of money you have on hand and can get your hands on very quickly — is sufficient. Tell your bank manager what you’re doing — bidding on real estate — and that person should be happy to provide such a letter. Don’t be afraid to disclose the amount of money you can access to finance the deal; refusal to do so can cause you to lose a valuable property. I know a couple who lost their dream home because they refused to verify the money until their offer was signed.

Ready cash also frees you to plan and begin rehabbing the property immediately rather than wait around for sluggish credit checks and loan approvals. You can have all your materials lined up ready to deliver the day after closing and have your contractors standing at the ready to start working.

Lining up financing can never be done too soon, and it’s something you should continue to work on. Always be on the lookout for additional sources of investment capital — cheaper money that’s more readily available.