A colleague recently closed on a 12-unit property in San Antonio and shared that a 6.8% cap rate, combined with lower property taxes, made it a no-brainer.

I live in a very desirably town in upstate NY, refinanced at a super low rate, so will keep the house as a rental.

You can shop 10 or 20 lenders in a weeks time, find out what products they offer, what rates, what overlays and qualifications they each have for you....

@Tom HallAt 7% if you can I would pay it down as investing it net after tax gains may not get you the 7% you are paying - so it’s less riskDownside is you lose liquidity of that money as it’s tied in your propertyIf rates come down in future you can refinance and even take some of the cash out.Regarding your question are rates coming down, a lot of factors come into play but right now it does not appear there will be significant changes to rates over next 3-6 months.

Financial Highlights•Acquisition Price: $72,000•Renovation Costs: $35,600•Total Investment: $107,600•Funds: raised from personal savings and private lender•Appraised Value: $160,700•Monthly Rent: $2,150•Cash-Out Refinance: $3,200 after paying off private lender and myself•Rate and Term Refinance: 30 yr amortization, 7.25% interest, 70% LTV•DSCR: 1.45% Lessons learned?

@Robby SanchezBridge loans are short term and if they default or mature in many instances the interest rate doubles - so make sure you have a very solid exit planI see many get a bridge loan and realize they don’t have the 25% equity in the deal to refinance to another loan and end up getting wiped or foreclosed on because they never researched what they needed to be at on the back end when they were refinancing.

We do lower rates, and I'm curios if others have run into a "floor price" below which you just get problem guests.

@Dmitriy Fomichenko scratch the part about being taxed at the capital gains rate, you’re right that it is taxed at income levels, however the rest stands.

The initial plan is a 1200 sf build out with plans to expand back away from the cliff later as finances and interest rates are more favorable.

I do not care what the source of the return is  Historically the highest return is via a value add and appreciation and is more so recently due to the recent rate increase versus earlier this century (before 2022).However, most new RE investors cannot handle extended periods of large negative cash flow.