Buy & Hold SFR Right Now?

[Elliott Kleiman]

Hey everyone,

I'm curious on your thoughts. I have an existing healthily cash-flowing rental portfolio but my current strategy is to buy SFRs in solid "B" areas in a steadily growing region. Once I rent them and refinance (5 year terms, 20 year amortization) they cash flow but just barely. In 5 years when the new loan term begins, interest rates will likely be lower and rents will likely be higher, resulting in an increase in cash flow. This future cash flow (along with equity growth) is my interest in this plan. Assuming there won't be any banking issues in getting new loans, what are the potential risks with this plan? Cash flow is hard to come by these days so hopefully some of you have been thinking about similar questions! 

[Taylor Dasch]

I personally just want to retire so I would prefer they be amortized over as long as possible. 

But this system definitely has great potential to build much greater cash flow in 5 years! I like it. The only risks would be that rents go down which I dont think will happen and even then you would still be sitting pretty well if the interest rate decreases - as long as the property is cash flowing at least a little bit today.