Buy and Hold - Long Term Rates and Cash Flow

[Nick Denning]

What is the logic in holding Adjustable Rate mortgages (ARMs) and Balloon rates in a rising rate environment?  At some point in the future, rates will rise and/or notes will balloon and your cash flow will be affected.  

Why not hold in a fixed rate, long term note?  Or are the Buy & Hold investors seeking to hold these for less than 10 years? 5 years? 

Thoughts? 

[Darren Eady]

Mostly cash-flow.  

I've held 5 properties at 2.875% on a 1yr ARM that I took each loan out eight years ago.

The payments and rate have been great, but it's about time to fix in the loans on different fixed term before rates rise.