5 year arm/20 year amort.

[Marcus Wright]

Started real estate back in 2017 w/ 20 doors so far. My latest Quad purchase was done differently that my usual 30 year fixed & though I’m far ahead since it was purchase late 2022. Below is the math.

Approximate Loan Amount: $300,000 based on $400,000 purchase price. 25% down payment. appraised at $395,000

Term: 20 years, with monthly principal and interest payments.

Rate: 6.16%  Fixed for 5 years, then adjusting every 5 years at the 5-Year Treasury +3.00%

How it played out, A great friend/private investor helped me closed on the deal with financing. It cashflow excellently (mostly going to the borrow down payment) & will only increase since rents were a few 100’s below market. Still I wondering,  How will I approach it in the future closer to the end of fixed 5 years. I don’t have a crystal ball for interest rates & I know Arms can be beneficial in some cases but centainly not all. Any input, wisdom or knowledge would be greatly appreciated.