Get Cash at Closing: The eight best ways to get cash at closing.
Get cash at closing: It is always a welcome bonus for a real estate investor – extra money to take care of unforeseen expenses on the new purchase, or extra money for your cash reserve.
In the past there has been a lot of bad publicity about cash at closing, because unscrupulous investors took advantage of this strategy in illegal ways. Despite all that, it can be done legally.
So how do you get cash at closing?
It is exactly what it states – you walk away from the closing table with a check payable to you for a certain amount after the closing of the property.
This is a list of the most common ways to get cash back at closing:
1. Wholesaling/Flip – this is the most common and used strategy. The investor makes money on the spread between buying the property at a price and selling it at a higher price. This is usually done on the same day (flip.)
2. Rents and Deposits – ask the title company to give you a check separately for the rents and deposits that you are supposed to receive so that they don’t get “absorbed” in offsetting closing costs. Then you can negotiate closing costs and fees down.
3. Lease Options – any time you issue a lease option, ask for a down-payment.
4. Partnerships – bring in partners and sell part of the property in exchange for immediate cash.
5. “Subject To:” Seller pays investor money to take over payments – yes, it is totally possible (and done all the time) and it is a win-win situation. The seller gets to walk away from the property, keeping his good credit, and gives you money (equivalent to 3 to 6 months of mortgage payments) for taking care of this problem for him.
6. Assign Contracts – same as wholesaling, but without buying the property and making money just by assigning the contract.
7. Selling a Note – even if you wholesale a property, you can “create” and attach a note without owning the property and sell the note at closing to an investor.
8. Cash Rebates – you can get cash rebates from real estate agents and title companies that you do business with.
There are a number of ways investors can leave the closing table with more money than they walked in with. The two critical ingredients are these: finding the right sellers and not being afraid to negotiate for cash back.
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