15 year fixed or 30 year fixed?

[Bud Gaffney]

Hi all,

I am a real estate investor starting out! I currently have a condo in New Bedford, MA with 1 year left on the mortgage, a 4 family in Taunton, MA with 14 years left on the mortgage, a single family in Westport, MA with 25 years left on the mortgage. I am looking to purchase a 3 or 4 family in the next month or two. I have ~60-70K for a 25% down payment. Here is my question to fellow investors. Do you use 15 year mortgages or 30 year mortgages? I am leaning towards 15 as it would still be cash flow positive on day 1. Any insight or advice would be so greatly appreciated.

Thank you very much :)

[Christopher Giannino]

@Bud Gaffney

I think it truly depends on your ultimate goals/risks within life as well as real estate.  I know some investors who want to be debt free ASAP so they would pick the 15 year note.  I know other investors who refi every few years to cash out and invest the "dead equity" found within the property so they would pick the 30 year mortgage.  It sounds like you have a couple of rentals under your belt now so I would start to think about what your future investing career will look like.  Do you want to amass a huge portfolio?  Do you want a small but debt free portfolio?  Are you looking for cash flow?  Are you looking to "retire" from a full time job in a few years?

As I'm sure you're aware, there are pros and cons to both options so I don't think there's a right or wrong answer here...  Just more of what you want going forward.