NEVER give HALF on a home...Makes no financial sense. Here's why you should ALWAYS leverage the bank's money:
Better returns on cash. You will get better returns on cash if you get a mortgage. The average minimum required to put down is 30%. If you split your money into 3 properties, you will eek out about 50% more on your cash. Rents in Las Vegas support great returns and here are actual case studies showing cash verses loans.
You can hedge against a bad real estate agent. To get a loan, the property must be appraised by your lending institution. If your agent doesnâ€™t do a good job finding you a property at or below market, you can cancel a typical deal as there is usually a contingency for the property to be appraised above the loan amount. Contact me if you want a list of pre-screened agents who wonâ€™t waste your time showing you houses above market.
Cash is not king. Many banks want the loans more than they want to unload the property. Even if you are the highest bidder with cash, a bank would rather take a lower offer if they can get the loan. Johnny Lunch bucket with a loan from Bank of America can cut you down if the property is owned by Bank of America. Smart agents will know which properties are owned by which banks. Investors go insane when they discover they lost an offer even though they were the highest bidder. Conversely, if you have a loan with a national lender, you can beat other cash offers.
Hard money loans are not the end of the world. Does anyone remember the days when mortgages were at 14%? Hard money loans are generally at 12% â€“ stiff but not unreasonable. Even if you factor in a 12% loan, you will still get a better return on cash. This page has a list of Las Vegas hard money lenders.