I have been building up my cash reserves (for the last few years) after maxing out the 401K and Roth contributions of course. With the cash reserves I was planning on subdividing my property and build another house but the city I live in really only wants to deal with big developers and city water and sewer had not been installing in my area yet. Having cash on hand would have been great for building that though.
That cash has been growing month after month, Have it in an Ally no penalty CD at 2% (best I could find)
Then my son one year out of college after landing a good job decides it’s time for him to start looking for a home of his own. Well in my area properties are hot hot hot. Most starter homes sell in a couple days for well over asking. After looking at a few with him and seeing them sold almost as fast as they are listed I thought,,,, “I have a plan”
Why don’t I use my cash and fund a house for him? Humm let me think about this? Well cash offers are always put to the top of the pile when a seller is looking at prospective buyers right? If I funded a house for him I could carry back a Contract for Deed (say for maybe 3-5 years and let him get ahead some then refinance and cash me out), charge him the same rate a bank would (okay maybe only 4% cuz he’s my favorite son). Win for me because I just doubled my interest rate! And win for him….(he gets to buy his first house)
Signed the purchase agreement last night and I am very excited (and proud) for him!
Sooooo? Who says having too much cash is bad??