Episode #9 – Cash is KING

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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