Summary:

In this episode of the High Return Real Estate Show Jeff Schechter and Jack Gibson discuss the reasons why Cash is KING and always will be.

Topics Covered:

  • The Golden Rule
  • The four major reasons to pay cash for investment properties
  • Finding sources of cash
  • Business structures that can protect your investments

Key Lessons Learned:

Cash

  • There is a new golden rule, “he who has the cash makes the rules.”
  • Paying in cash puts you into a superior position compared to leveraging debt.
  • Paying cash for a property will almost always lead to a discount on the asking price.
  • When it comes to investing, the only thing you should care about is ROI.
  • There are four major reasons why you should consider paying cash for your investment properties:
    • Cash improves the strength of your negotiating position. There is a time value to money, paying in cash frees up capital for the seller.
    • Many more options when you are not financing an investment purchase. Banks are less likely to finance a property that needs repairs.
    • It’s much easier to do a cash-out refinancing of a property that has been purchased entirely with cash. This will often allow you to increase the appraised value of the property before cashing out, leading to a practically infinite ROI.
    • There is no risk involved if the housing market changes.
  • “There are no limits to resources, only limits to resourcefulness.” -Tony Robbins
  • There are a variety of sources that you can access to generate cash, you just have to be resourceful enough to find them and persistent enough to stick with it.
  • Investing in property has to be done with enough cash is reserves or you run the risk of being blown out by Murphy’s Law.
  • Bonus Strategy: Setting up a compartmentalized business structure can protect you from certain risks and allow you to take advantage of a variety of tax benefits.

 

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