This is the second post in a three-part blog series on buying a home with cash. So far, I’ve covered Part 1.
How Much of a Discount Can You Get When Buying a Home With Cash?
It’s common for people who are buying a home with cash to still get discounts on properties, but the biggest discounts are typically on the properties that need a good amount of work. Even in these cases, a good discount on averaged price properties (around $400,000 - $450,000) in the current healthy Northern Virginia real estate market would be around 10% as opposed to the 20%+ discounts that were more common back in 2009. The reason is there are a lot of casual investors who are more than happy to take a 10% discount on a property in this current market, so you’ll be competing with these types of investors. These buyers are perfectly fine with buying the property, fixing and flipping it, and making a 10% profit, and then doing the same thing over and over again throughout the year to make a nice income.
If you’re an investor who is buying a home with cash and you’re focused on the goal of making a 20% profit, you’ll need to turn your attention to fixer-uppers at higher price points. First time home buyer price points are just too competitive among casual investors to get a huge discount. Homes at higher price points that require extensive work generally scare off casual investors and create opportunities for serious Northern Virginia real estate investors who have teams of contractors and a lot of cash on hand to invest.
Read the third and final post in my blog series on buying a home with cash.
Are you interested in getting started with real estate investing in Northern Virginia? One of the areas I specialize in is helping buyers find undervalued properties that need some work. One reason I’m good at this and enjoy doing it is that I not only help my clients find these types of properties – I find them and buy them myself.