Many real estate investors are finding they are cash rich right now. With stocks, crypto, and other types of investments still looking incredibly risky and overpriced, why should you be financing your real estate deals, even if you have the cash on hand?
Why Not Use Financing?
It can sometimes be tempting to use your own cash to fund investments. Sometimes financing, and especially mortgage financing is seen as an extra step and cost.
It is worth pointing out that the richest billionaires and investors typically don’t use their own cash. They still use loans when they could pay for a property many times over. So there has to be some sense in it.
Financing doesn’t have to mean extra cost either. Not when you factor in the reduced risk of using leverage, the advantages of diversification and being able to do more volume, and the supersized true high cash on cash returns from putting less of your own money in.
This is especially true when interest rates are so low. Besides, when you are wholesaling and are in and out in a matter of hours or days, it doesn’t make much difference whether rates are 1% or 18%.
Stay Liquid
As much as that money may be burning a whole in your pocket, and you really want to use it, it can be even more important to have liquidity. They say that “cash is king.” That means having free cash on hand, not paying with cash.
Having more cash on hand means you are covered in emergencies, and the constant unexpected, and will remain a stronger borrower.
You will also be prepared to seize on even better and bigger deals as they pop up. The ones you usually have to kick yourself for missing out on because all of your cash is tied up in deals.
Invest Your Cash In More Profitable Things
What do you do with the cash if you can’t bear the risk of it just being eaten away by inflation or sitting in a bank?
There are certainly more profitable uses for it. Other ways to multiply it in your investing. Like putting it into marketing to find more and better deals, and finding better buyers who will pay more for your deals on the sell side.
"I want thank you for the excellent service I received from Best Transaction Funding.The quick response I received from your company from the beginning of the transaction and to the end was unbelievable. I also want to give a special compliment to you as well. You went to great lengths to keep me informed and gave my title company all the information they needed to complete a successful closing. I cannot express how thankful I am. Such service builds great working relationships. I will definitely recommend Best Transaction Funding to all my fellow investors. Thank You."
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- Dave Pricken, Real Estate Investor, NJ
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- Phoenix Properties, LLC, Ronald Destefani, Investor, PA
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"To you I say, ”KUDOS to Best Transactional Funding and Thank you for providing the education and services to Real Estate Entrepreneurs like me. Please keep up the good work!'"
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"You each deserve high marks for your wonderfully quick response time to each of our questions and requests! You hit home runs with us! Your application system was easy to use. Our deal met your qualifications and every time Rob Kozak or any member of Mystic Properties, LLC phoned, we received a "real" person dialing back to speak with us.
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"Boy, you guys are impressive! I can’t thank you enough for scrambling and getting my deal done at the last minute like that. You and your team were awesome!"
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