For those few with the necessary liquidity, buying house rentals for cash makes a lot of sense. You avoid the transaction costs and delays of getting a loan and can hammer the seller on price. You are the only bidder on non-loanable houses like code-violaters, cracked slabs, serious fixers, etc., that lenders avoid. Fix the problem, rent it out, and enjoy the cash flow, which should be 8% to 12%+ on your investment.
Then refinance and repeat on another property. For those entrepreneurs with the knowledge and experience, this is a valuable niche. And it will clean up the debris left from the collapse in RE, and actually help the market recover.
Compared to 1% to 3% from our stingy bank CD’s, that looks pretty good.
