is an ARM loan type ok or use Fixed only

[Matt Edwards]

Hello, 

I am new to real estate investing. I'm focused on buy and hold (rentals) Single Family Homes (SFH) properties. I have been working with a bank. They have a good 9 month construction loan, which I find good for those I can get cheap that require a good amount of work. I then discussed loans for non-owner occupied since those will need to convert to that type, or buy without construction needed. They only offer a 5/5 ARM @ 5.50%. While this rate is high I even offered a higher rate but fixed rate, so I could have a consistent exact expense plan. Is an ARM ok or should I begin working with another bank?

[Patricia Steiner]

For long time holdings, you would want something else than a 5/5 ARM. That's a commitment to refinance or ride a wild interest rate ride. While non-existent until recently, there are 30-year fixed commercial mortgages now available. I also recommend looking into non-recourse financing. One advantage of this forum is the number of lenders who are members and I'm sure will weigh in with a host of options. Please shop for the best financing options.