Would you pay cash vs high interest rate?
Opportunity to buy a house for $80k. It would be a buy and hold and the cash flow and COI are decent but the interest rate is a killer. Would you consider paying cash for it. Kills your capitol but increases initial cashflow and cuts out all the interest...
Id rather keep my cash, incase a unicorn deal comes along and I need funds. If it doesn't cash flow unless I pay all cash for it, its probably a deal I don't want.
Interest isn't as big of a concern to me. If the deal cashflows at a high interest rate that's good. Means it will cashflow great when rates go down.
Quote from @Rhianna Cultrona:
Opportunity to buy a house for $80k. It would be a buy and hold and the cash flow and COI are decent but the interest rate is a killer. Would you consider paying cash for it. Kills your capitol but increases initial cashflow and cuts out all the interest...
Can you split the difference, put a little more down and get a shorter term ARM?
I would never buy all cash but nothing wrong with low leverage for example 50% or 60% LTV deals. Can always cash out refi the money back out if rates do drop in future and thats where a deal now can be a home run in the future.