7/1 ARM vs 30 YR fixed... opinions?!?!

[Josh E.]

Hey BP - I just went under contract for my 3rd large duplex in Utah, this one for 378,000. I have a choice in my financing: to do a 7/1 ARM or a conventional 30 year. My other 2 properties are on 30 year fixed. I have no idea if or when I will plan on selling this property I'm currently buying, but if it appreciates half as much as my other 2, I could easily sell it before 7 years are up and 1031 to something bigger. But not having the fixed amount for 30 years is a little unsettling considering I don't know what will happen in the future. Details: (with 25% down) 7/1 ARM - 3.625% rate, p&i 1292.91 30 year fixed - 4.25% rate, p&i 1394.65 So With the ARM I would save 100/month on cash flow, or 8400 in the 7 years of a fixed rate. After 7 years, the ARM can go up a max of 2%/year with a max of 9.625% over the life of the loan. So look into your crystal ball and let's talk about what you think rates will do over the next 10 years.