Financing Spec Rentals

[Roy Gamiz]

BP Nation, I'll take any advice on the following. Buy and hold investor here. In 2015, I sold a rental which turned into 3. I bought a duplex on a conventional loan, then bought 2 separate lots outright to build on in the future.

Current day, I've built 2 new rental houses using construction loans on each of the lots. It's coming time to get long-term financing since the houses are almost finished. I have a local bank (same one I have construction loan with) that is offering terms of 5% for 5 years (on 20 year amortization schedule) and no additional closing costs/fees. Both houses are fully leased for the upcoming year and this is in the central Texas area, in case region plays a role.

I do plan on holding these properties in a Series LLC which the local bank doesn't see as a problem as long as I also sign for the long-term financing.

Based on the research I've done here on BP it seems that the terms above are pretty common. My concern is that interest rates may rise in the future. Should I go keep looking for a 20 or 30 year fixed rate option? I see a fixed rate as a safer play but since I don't have to put any additional money out of pocket with my current financing option I'm thinking I should go ahead and stick with it.

I could always refinance later on, right?