When You Have Cash Time Is Your Friend

If you are a real estate investor looking for below market rental properties you need to realize that Cash is King, but Time is the Motivator.

Yesterday I was reading Jim Crawford’s post titled In the Current Real Estate Market Cash is King Negotiating the Sale of a Home With A Cash Buyer. I found the post to be well written, on topic and especially helpful to the real estate investor looking to expand his or her portfolio.

But I do want to hone his argument to a finer point. While Cash is King most sellers receive cash (or equivalent) at the closing table. So it’s not the cash that will motivate the seller to sell below his asking price. Rather, it’s probably the time and ease the cash buyer brings.

Cash buyers can close next Tuesday. Time. It’s the motivator.

A “borrowing” buyer can get cash equivalent but it’s going to take a couple to a few weeks and is subject to underwriting standards. To someone under stress or really motivated to move on, time will equal an undisclosed amount of cash. And the less the time, the greater the time to cash equivalency will be.

Are you following me here? Saving a seller one more mortgage payment is easily worth that payment. Probably a premium above that, too. Helping a seller to get out of town to join her husband with the kids will be worth “X”. Relieving a cash strapped single mother of three working two jobs to make ends meet, and relieving her of that burden this week, is worth something to that overworked mother.

It doesn’t matter the motivation of the seller so long as you tap into it. I think you’ll find that in many cases it boils down to timing. How that timing relates to their situation is what you have to find out…and use to your advantage since you have cash. After all, you are a real estate investor, aren’t you?