Obviously, you don't want to have a high interest rate locked in, but if it is the only way to close on an otherwise good deal, the short term cost may be worth it.

You should probably place more equity in this deal and refi once rates drop or sell it if you can't take the cashflow losses.

It's worth considering the credit rating of an insurance company and how long they've been in business. 

Three years ago, my wife and I purchased a duplex with a 3.25% interest rate.

We are looking for properties in a B or C area with a B or C rating and most importantly, the investment property should have a value-add capability.Ideally, we are looking at properties between 50 and 200 units but if close enough and a win-win, we will to take a look.Contact me if you are a serious seller or Seller Broker/Agent.

This is because FHA loans are assumable, which means that a potential buyer is willing to pay a higher price for a home if they can take over the existing low-interest rate mortgage.

Considering how much the area has appreciated, it may be tough for your friend to cash flow with current interest rates. 

The variable interest rate went from 5.25 originally (not bad) to between 8.5 and 9% now, meh.

At most I'm seeing about 2%  5 year rate of return when I put the numbers in the calculator. 

@Detrick Bell cash flow is tough right now with current rates, prices, Houston insurance rates, and texas tax rates.