Hello everyone, welcome back to episode 32 of the WIIRE Podcast! This week we have a special request from one of our followers on Instagram. Melissa writes:
“Hello loving your podcast. I'm new to real estate and we are looking for strictly cash flow to pay for liabilities we have. My husband wants to buy our first investment property with cash, hold, and then later when rates come down, and hopefully, the place appreciates, refinance. I would love a podcast on buying all cash and whether you think that would be okay?”
The short answer, it depends. But what does it depend on?
Well, there are a few factors we would take into consideration before making this decision and in this episode were going to talk about strategies for buying cash, the perks, and the pitfalls of both ways.
What it really comes down to is being able to predict when rates are going to come down. If we could do that, we would be crazy rich. But since we can’t we need to know how to lean into what you know and what you are comfortable with. If you know that you have no debt on a property and you want one cash-flowing rental then that could be a great option. However, if you are looking to scale we would advise against it because you want to keep your capital moving, as quickly as possible in most cases.
So many things can happen to any one given property so consider that. We like to have some diversification in our portfolios. Even if all of your properties are in the same market you can still have a diverse portfolio because you are not relying on one single tenant to pay for everything for you. If you are planning to buy a property then BRRR, or refinance within six months to a year, then we would consider that purchase.
Melissa also mentioned refinancing when the rates come down, but consider this: why not purchase it via financing right now, then refinance again when those rates come down?
“Just because you have a loan on it doesn’t mean you can’t refinance it.”
For us, we're in scale mode; so it's all about the next property. However, Melissa might not be. She might want one and done and that's okay. It’s a really personal decision and there is a lot to consider on both sides.
Thank you SO much, Melissa, for submitting that question. If you have a question you’d like us to feature in an upcoming episode send us a DM on Instagram or reach out via email.
Thanks for tuning in, we’ll catch you in the next episode!
Resources:
WIIRE 120: What Should You Be Looking For When You Do a Property Walk-Through?
WIIRE 119: Balancing CEO and Stay-At-Home Mom Life with Kristen Witalka
WIIRE 118: What Financial Tasks Should I Be Doing Weekly, Monthly, & Yearly in my Rental Business?
WIIRE 117: Small and Mighty Real Estate Investing with Chad Carson
WIIRE 116: How to Use Free Marketing for Your Rental Business
WIIRE 115: How to Implement the Entrepreneurial Operating System in Your Business with Maya Bovshow
WIIRE 114: Our CEO Roles as Full Time Real Estate Investors
WIIRE 113: Fourplex From Hell: Resilience as a Rookie Investor with Katie Hofer
WIIRE 112: Legal Contracts You Need in Your Real Estate Business
WIIRE 111: Lessons Learned While Self Managing Rental Properties
WIIRE 110: Ask A&G: Midterm Rental Frequently Asked Questions
WIIRE 109: House-hacking New Build Homes Tax Free with Monica Fullerton
WIIRE 108: Best Tenant Screening Practices
WIIRE 107: Starting Your Real Estate Journey At Any Age with Liz Connelly
WIIRE 106: Increasing Your Profitability without Buying More Real Estate
WIIRE 105: Midterm Rental Operations with Jamie Banks
WIIRE 104: Handling Maintenance Requests Like a Pro
WIIRE 103: Midterm Rental Co-Hosting and Credit Card Hacking with Jaina Pallasigui
WIIRE 102: What Can You Expect At A WIIRE Retreat?
WIIRE 101: Serial Real Estate Entrepreneur with Erika Brown
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