Re: Tip from a Buy w/ cash professional investor - Posted by Millie I.
Posted by Millie I. on November 20, 2000 at 12:27:17:
How you go about it depends on whether you want to be an INVESTOR or just a HOMEOWNER.
CASH IS POWER only if you invest it wisely. If you have a lumpsum coming in, unless you get that regularly, I recommend that you have a goal for financial growth and well thought out plans to accomplish it. You can have a single agenda, put all your eggs in one basket, and maybe earn a few bucks when you sell; or you can diversify in a more dynamic strategy, spread your money in several sound investments, and with good planning, dedication, and determination, build a financial fortress for your family.
BUYING WITH CASH is profitable if:
1)You are buying way below market value (60% or below) where the profit is secured going into the deal.
2)You are competing for an attractive deal where a guaranteed cash offer may sway the seller’s decision in your favor. (eg. REO from banks at wholesale price )
3) A motivated seller needs cash NOW to move, and is willing to sell you the property for a whole lot less.
A DYNAMIC APPROACH:
If you have a bag of seeds, you can make soup and feed your family for one meal, or you can grow a plantation and secure your family’s financial future. If you have $250K, you can buy one nice house with cash and have a peace of mind that it is paid for, or you can use it as a downpayment for FIVE 4-unit rental properties, and have 20 tenants paying your mortgages and expenses, and with some dedication on your part, a nice monthly profit for the next 30 years. You can sell them for a big profit when you retire, or you can refinance them in a few years when the property values go up, take your downpayments back out and buy another 5 rental properties. Now you have 40 tenants supporting your family. At that point you could even quit your job and be a full time landlord/investor.
Owner-Occupied-Buyers gets the Best Loans:
When you buy a house to live in (could be 1 to 4 units), unless you are already retired and don’t want to deal with mortgage payments, or you have so much money you don’t know what to do, you should always take advantage of the many government or lending institution programs out there that offer owner-occupiied-buyers the best terms (zero/low down-payment, low interest, low payments, etc. that are not accessible to non-owner-occupied buyers ). This could even be an investment property as long as you live in it .
WHAT MAKES YOU RICH is not how much cash you have, but what you do with it. Money tends to disappear very quickly when you have no plan to grow a MONEY TREE.
THINK AND GROW RICH !
Best of Luck,