On this podcast episode I talk about wholesale real estate versus retail real estate. This podcast episode topic is an important concept to understand. This episode topic came about based on a question by one of our listeners. There question was “why pay 10% interest if you can get a 4% mortgage? That’s a great questions and I thought it would make a good topic for a podcast episode. I called it Wholesale Real Estate Versus Retail Real Estate because this is really the essence of you understanding why as cash investors we need to use private lenders. If you are buying wholesale real estate then you are paying all cash and you cannot use a regular mortgage. The reason you cannot use a regular mortgage are because either the seller will only accept all cash or a mortgage company would not offer a mortgage (for example on a damaged property). Situations where you would have to make an all cash offer include: BANKS Banks do not accept mortgages when they are liquidating properties so any offer on an REO, Short Sale, Foreclosure or Pre-Foreclosure would have to be all cash AUCTION SITES Auction Sites like Hubzu, and Auction.com will only accept all cash offers and will not take offers with a mortgage DAMAGED HOUSES Houses that have any kind of damage from water, flood, mold, or fire cannot be purchased with a mortgage BUYING FROM MOTIVATED SELLERS If you are buying a house from motivated sellers where you say “we buy houses for cash” or you are using postcards, yellow letters, Facebook Ads etc. to market to motivated sellers then you have to pay all cash. On all of the above scenarios you would need to make an all cash offer which means you need to either have the cash yourself or you need to use a private lender or hard money lender.