Delayed Financing or Technical Refinance

Delayed Financing or Technical Refinance refers to a situation where a buyer uses cash to purchase a property and then refinances the property to withdraw most of the cash used in the purchase for future investments. This scenario happens frequently in markets where making a strong cash offer allows the buyer to beat out other bidders since sellers might favor cash offers due to the reduced chances of financing fallout and faster closing times. This type of refinance does not need to meet the usual title seasoning requirements and it must generally be started within 6 months after the closing date of the purchase. Depending on the lender and program, this refinancing may be priced as a rate-term or a cash-out refinance.  

Rehabbers

Some buyers are interested in purchasing properties that are currently uninhabitable or in need of extensive work, with an eye toward rehabbing them either to live in themselves or rent out at a profit. These individuals are known as rehabbers.

Note that lenders may not offer a mortgage on an uninhabitable home, no matter its potential, making rehabbers among the most frequent cash buyers.

Empty Nesters

Individuals whose children are grown and moved out may wish to downside and start a new phase of life in a new residence or seek out a retirement home that they can enjoy in their twilight years.

Many may have paid off their home mortgage already and may wish to use the proceeds of the sale of their current family home to purchase a home to retire in without taking on another mortgage.

Real Estate Investors

Real estate investors looking for discounts frequently buy properties at auctions or seek out short sale opportunities, which require them to be able to move quickly to closing. Under both circumstances, an all-cash deal may be a necessity. 

Delayed financing is a popular choice in general with these all-cash buyers, who often seek to maximize liquidity and the number of real estate holdings that they can acquire.