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Leonard, Real Estate Pro in 89052

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Asked by Leonard, 89052 Mon Oct 18, 2010

I have a quick question. Do you see some of your investors pay full cash to purchase some REO under the market value but good turn key properties which will generate cash flow immediately then go to get refinance later?
As I heard from investors that in Vegas, people pay cash first to get great value in foreclosure and then refinance it later. I don't know if it is a good way to invest as the large cash tied up maybe a big risk but the loan close will take much longer time and uncertainty. So I want to ask your professional opinion on this. What are the pro and cons for doing cash first then take the home equity loan. And does your company help your clients to go through this kind of process? and what are the biggest challenges on getting the home equity loan.

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Northwest Arkansas like Vegas suffered from an excess amount of homes and price increase when the market was going hot.

I think a cash investor has 1 thing in mind - cash flow which determines the amount of down payment. With market prices still in decline it makes no sense to pull your cash out in the next year or two due to closing cost and risk of depreciation.

Cash buyers may flip on the short term investment of less than year holding period after rehabbing a poor condtion property which returns their cash plus profit without replicated closing costs from a refinance.

Ed Simpson

http://www.FIrstREALTORS.biz
0 votes Thank Flag Link Mon Oct 18, 2010
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