What does cash only really mean in real estate?

Cash is a simple term in real estate. You can only pay cash for the property. There is no financing available.

While technically correct, cash only has deeper implications for real estate investors. One consequence is that the property may not be eligible for traditional financing. The traditional mortgage lender might not have been able to finance the property. 

This could indicate that the property is in poor or very poor condition. As distressed properties, cash-only properties will often need significant repairs. But what does cash only sale mean in real estate? The answer is below. 

If the after-repair cost is higher than the property’s purchase price and the cost of repairs, they can be very profitable. The property could be in disarray for many reasons. It may have been abandoned, foreclosed, or neglected for a long period. A natural disaster could have caused significant damage to the home. The property may not always require significant repairs. However, a constant for all cash-only sales is that the property does NOT qualify for a mortgage.

Cash-only properties: The advantages and disadvantages

A seller may list a house as cash, not out of necessity but because they want to sell it quickly. They don’t want to go through a mortgage financing process and want the cash upfront.

Cash-only properties also have fewer hurdles. The deal closes quickly and without delay. The seller doesn’t need to worry about contingencies or the buyer leaving the deal. They’re only paying cash.

Buying a cash-only property is significantly easier than the mortgage process, and there’s less chance of it falling apart. The buyer has greater security and can save more money long-term. Ideally, fees associated with the mortgage process will be eliminated.

But cash-only properties have their disadvantages. They are expensive because you have to spend a lot of money. You might also find the home in such a bad state that it is impossible to profit from the repairs. A buyer loses both liquidity and flexibility. Having so many funds tied to one purchase is risky. Also, cash buyers miss out on the tax deductions associated with mortgages.

A cash-only property is not for everyone. It depends on many factors. The first is whether the buyer has enough cash or access to funding. The property is a major determinant of whether the buyer should purchase the cash-only property.

It is important to identify the right building material for a home. Concrete houses are non-standard and should be professionally surveyed. You should check for new warranties and find out what’s and isn’t covered. It is important to ensure that there is no management company so that the investor doesn’t pay any hidden fees.

How do you get the money? Many people don’t have the cash to invest in real property. Most people need to have cash from somewhere else.

What is considered cash, and where can I get it?

Cash buyers generally have more advantages than other buyers. Cash buyers can close faster than traditional buyers due to the lack of appraisals. A buyer is rarely buying a house with cash. They use their own money and do not need financing. Sometimes, they might receive cash from a third party. They might be able to find a company that will buy a house with cash or tap into a retirement fund.

Hard money loans are the best way to obtain cash for cash-only properties.

What is a Hard Money Loan?

Hard money loans are not normally considered cash. This is a loan that requires approval, just like traditional financing. Hard money loans require a less rigorous approval process.

Hard money loans, also known as last-resort loans, are used primarily for real estate transactions. The best thing about hard money loans is the speed at which they can be approved. While hard money loans are approved in a matter of days, traditional mortgage loans can take up to a month. This is extremely advantageous in a sseller’s market where the demand for the property exceeds supply.

Hard money loans are used primarily for repairs and fix-and-flip of distressed properties. This is precisely what cash-only properties require.

Hard money loans are approved faster than mortgage loans because they don’t depend on applicants’ financial situation. Hard money loans are instead based on the property. Hard money lenders decide the terms and rates of hard money loans based on the estimated after-repair value. Although hard money lenders will still consider credit, they only seek proof that the borrower meets a minimum of 600.

Lenders use the property to secure loans. If borrowers default on a loan, the lender will take over the property. This process is much quicker and less expensive than foreclosure.

Hard money loans have their cons. They present significant risks to the buyer and lender. Hard money loans have significantly higher interest rates than traditional mortgage loans. The average interest rate on a 30-year mortgage was 4.183% as of March 13, 2022. However, the average interest rate on a hard money loan is between 8-15%.

Hard money loans have shorter repayment terms than traditional financing. These loans usually have a one-year repayment period, much shorter than a 30- or 15-year mortgage.

Hard money loans have a lower loan-to-value (LTV) than traditional loans. Hard money loans are less likely to cover the cost of the home than mortgage loans and therefore require higher down payments.


Hard money loans are available for cash-only homes. It’s not traditional financing, so sellers view it as cash. A hard money loan is not from a bank. Because they can provide cash quickly and close quickly, hard money loans are the best fit for cash-only homes. Cash payments for cash-only properties are inherently risky. A hard money loan is also an option.


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