In a number of instances, the seller might need cash. The reasons for this could vary as they might want to buy deposits, cover repairs or holding costs.
Whatever the reason, giving your seller cash can really sweeten the deal and in doing so, get a bigger equity spread, as a result.
So, here are 3 ways by which you can raise that cash you need to make real estate deals:
#1: Private money or hard money loans
When you pay cash for a house, it’s never more than 75% of the original costs after deducting repair costs as well. For this, you can borrow money from a ‘collateral’ lender who will charge you at least 11% to 16%. Just remember that money lender will only offer interest only loans.
#2: Opening an equity line of credit
If you have equity built up in other investment properties or your personal home, you can use it to borrow cash against the same. Pledging a number of mortgage properties that you have as collateral also works. You can set it up as a line of credit and pay it back as soon as you have sold or own the property. Of course, you only have to pay interest for that portion of the credit line that you used.
#3: Sell off a real estate note or home for some cash
If you have a home not sold just yet along with cash tied up, then it’s a good idea to sell it off aggressively so that you can use that money for other properties that might turn a nifty profit.