[Calc Review] Help me analyze this deal

[Joe Michaels]

Hello BP family,

Just joined and need help to analyze this deal. This will be our second investment property so we are basically newbies. Our goal for this property is to own for 20 or so years then sell to fund my daughters college. We would like refinance in year or two so we can get our capital out but have a couple questions for you guys. From the 6 or so quotes I got from small banks and credit unions it seems like higher the closing costs, lower the interest rate. I think this is because of an "investor fee" that the credit union passes on to the borrower from Freddie and Fannie. The small town bank does in house mortgages The interest rate is 1% higher but way lower closing costs and will do 75% LTV where the Credit Unions only do 70% LTV.

Credit Union -REFI

Loan Amount	$59,500.00
Closing Cost	$6,000.00
Amortized Over	30 years
Loan Interest Rate	4.376%
Monthly P&I	$297.11
Total Cash Invested	$8,368.36

Cash flow - $161.57 30.45% Cash on Cash ROI

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Small Bank - REFI

Loan Amount	$63,000.00
Closing Costs	$3,000.00
Amortized Over	30 years
Loan Interest Rate	5.850%
Monthly P&I	$371.66
Total Cash Invested	268.36

Cash Flow - $67.92 . Cash on Cash ROI 303%

So is it better to have an almost free property vs one with better cash flow?  Thoughts?

Thanks 

Joe

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*This link comes directly from our calculators, based on information input by the member who posted.