STRATEGY
TRANSACTIONS
Cash is NOT King WHY CASH IS EMPEROR — AND IT HAS NO CLOTHES
by Steve Streetman
e’ve all heard the maxims: “Cash Is King,” “Cash Plays,” “Money Talks.” And there is nothing wrong with those terms. It is absolutely true that for most sellers out there having cash is the ultimate for a quick and easy sale. Having cash means that there are no other parties involved in deciding whether you can close. So, as far as it goes, this advice makes sense. When you are dealing with unsophisticated investors or sellers who only know W
one way to do a deal, cash is not only king, it is the emperor. It is the absolute ruler and the top of the chain when it comes to assets you would accept for your property. I claim however, that in reality, no one wants cash. Cash in and of itself is a depreciating asset, able to purchase less every year that you have it. Cash is nothing but government debt. And governments, since the crash in 2008, have shown an unquenchable thirst to print more
of it at unheard of and unsustainable levels. The more money they create out of thin air as new debt, the less your money is worth. In addition, when cash is used as a medium for exchange, you often have to pay taxes or fees both when you get the cash (sell your property) and when you buy what it is you really wanted (the next property or whatever other asset you purchase). So, cash as a medium, doubles your transaction fees.
74 | think realty magazine :: may 2020
Made with FlippingBook Online newsletter