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.
- 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:
- 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.