10 year arms pros/ cons

[Cody Phillips]

Hey guys just got an offer accepted on a 3 family and current interest rates for conventional loan for investment properties are around 7%, with 25% down. I talked to the company that manages my 401k and they are offering 30year with a 10 year arm at 4.75% with 20% down. My understanding is that this means the first 10 years are at 4.75% and after the 10 years it adjusts to the current rate at that time, you’re also able to refinance at any point. Was also told the max the intrest rate can increase is 5% (so 9.75% worst case senario) Seems like a win win to me also the extra 5% down payment would be and extra almost $20k saved out of pocket.

What’s everyone’s thought on this?