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I have had a lot of people asking me why they are seeing cash only properties listed on the MLS. There are actually a few different reasons for this.
Cash Only Properties
Cash Only Properties
- One reason has to do with the condition of a home. Banks evaluate the condition of the property in order to secure a loan.
- Most cash-only properties have a lot of value, but their condition is the biggest obstacle to acquiring a loan.
- Most banks do not desire to get saddled with a property that is inhabitable or severely distressed.
- Look into portfolio loan products: If you have the assets to put down a large down payment and possibly Escrow, then a bank would probably take out a portfolio loan for you.
- Renovation Loans: You can acquire one of the loans for as little as 3.5% down, but you also must hire professional renovators and may also end up having to do repairs that you had not planned for. The upside to these loans are that they are customizable.
- Use various methods to obtain cash: You can secure a line of credit, or you could secure funds from assets that you already have. Ideally this would be a short term acquisition so you can turn around once the property is fixed and get a mortgage on a premium property.
- Pay Cash: This is the easiest way to obtain a distressed property. It allows you a lot of flexibility, and you can do what you want, when you want, and how you want to do it.
