Unpopular opinion? 15 year vs 30 year mortgage

[Andrew Barrett]

Thoughts?

I am trying to explain that because I’m 25 and make $200k-250k a year (mostly from flips) that using a 30 year mortgage on my 1031s for the 2-3 rentals a year— makes sense?

they are insistent that 15 years is infinitely better and not even in the same ball park as a 30 year loan. 🤦‍♂️ 

In what way can I explain this to these people (mentor, other local investors that I have weekly convos with, and some friends that aren’t super investor savvy)

(goal/action:I am trying to buy 3 single family or small multi fam properties a year -rentals — I buy on avg- 5 flips a year and avg 35k profit per deal consistently because my method is easily repeatable/similar properties etc— I make 75k+ selling real estate and about $150k-$200k doing those 5 flips

^ and I 1031 at least 3 of those)

(my thought is- I have a lot more opportunities with a 30 year 20% down conventional loan...than 15... my break down of why I feel that way just doesn’t make sense to multiple people despite obvious key factor but mostly because they were either taught or learned the opposite early on In their own personal investing strategies/planning. Note: they are 23 to 59 so I’ve tried videos, calculations, and writing out specific deals... am I missing something? And yes I know it varies by plan and really isn’t that different in the grand scheme for most people ....but humor me

[Joshua McMillion]

@Andrew Barrett

Congratulations on your success in RE at a young age, and it's commendable that you also want to help educate others. The individuals you are speaking with have different goals, and I would first start by asking what their exit strategy will be with their homes. If they express, they would like to sell under 10 years, that could be an easy way to explain that mortgage rates are at a historic low, which comes with leverage. 

With mortgage rates being significantly low, a 30 year fixed mortgage allows for higher cash flow, given the principle and interest payments. However, if their goal is to purchase this home and not scale, a 15-year mortgage may be better. It depends on what they are trying to achieve. 

Sincerely,