Cash is king in real estate investing was a common phrase from my mentor, Hulet Gregory when he started coaching me on taking my business to the next level. This is a true statement, but the challenge for most of you is not the belief that cash is king but the lack of cash itself. So let’s go over a few sources of drawing cash and then I will suggest on how to use it as leverage:
- Equity lines of credit
- Credit cards
- Checking and savings
- CD’s, stocks, and bonds
- Cash value life insurance
- Cash-out refinance on properties
Depending on your situation, you may have access to all of the above or you may only have credit cards. Either situation can put you in a prime position to borrow money. Let’s face it; it is easier to get money when you don’t need it. Also, use your cash as a back up plan. For instance, you want to buy a property with no money down so you use a hard money loan only to find out you need $5,000 at the closing on your permanent financing loan. Your cash on hand is your money to bring to the table even though you didn’t expect it. Don’t say that it isn’t a great deal when you have to put up cash on a deal like this. Instead, look at your cash-on-cash return and look forward to positive cash flow every month.
Lastly, if these cash options still don’t apply to you, find potential partners who have put away cash in these vehicles to fund your deals. Cash is King in real estate investing—even if it is not yours!
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