Updated almost 6 years ago on . Most recent reply
30yr Fixed vs 7yr Arm
Hi BP Team,
I have an investor in the middle of his BRRRR and would love your input.
He purchased a duplex for $1.1mm. He financed 80% with a 30yr fixed at 3.75% and hard money loan for the balance at 3% for 2years. After rehab the value is around $1.6mm. He lives in one. The rent of the 2nd unit only covers the conventional loan.
Which option would you recommend or is there another option I can present him?
Option A:
Refinance to a 7yr ARM at 3.25% and use the equity to purchase another profitable multi-family.
Option B:
Keep the current 30yr fixed at 3.75% and re-negotiate terms on the hard money loan.