I’m frightened to buy a house with cash.

We (39m and 36f) are days away from closing on a home that we are buying with cash. We netted about $500k on our previous home sale in March, have relocated for a business opportunity, and are set to get the keys of the new house this week. I was all in on getting a mortgage for this property ($325k purchase price), but due to our new self employment, getting financed was showing to be difficult— even with 800+ credit scores, a co-signer, and over $500k in cash. Our bank that holds our business accounts was set to finance us at 6.75% with 20% down for the purchase, but our co-signer ended up getting cold feet and now we have no option to finance in time to close.

I still have time to abandon the deal. I’d be out our $5k earnest money but I feel like that’s a small price to pay to not have a lot of cash tied up and let that money make me more money in the market and I could recoup the $5k reasonably quick, if market persists.

Two other considerations here:

1.) the property we are buying has two homes on it and one has a long time renter. The rental nets about $9k/yr.

2.) we’ve been currently shacking up with family since March while we house hunt. This is getting old. The house we are under contact with has been the best fit for our family and situation that we’ve seen in half a year of looking in this area.

Are my concerns of paying cash irrational or should we just go ahead and own it? What would you do?