Real Estate Broker · Franklin Park, IL · Member since 2019 · 22 posts · 16 votes
Hello Everyone,
I'm working on my first BRRRR transaction, and I'm curious what your thoughts are regarding refinancing terms. Would you recommend a 15, 20, or 30 year mortgage? Here is my current situation:
15 year, I would cash flow $100/month
20 year, I would cash flow $300/month
30 year, I would cash flow $500/month.
I have $150,000 into the property, and I'm planning to cash out $175,000. The bank actually told me, I can go as high as $205,000. So, I'm also wondering if I should pull out more? Any info would be greatly appreciated.
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
6y
As far as how much to borrow, @Chrystian Tapia, that really depends on the finances of the property. What are the rents, expenses, ARV, and NOI? I'm assuming this is a MFR, right?
I always recommend a 30-year mortgage. You can always pay it down like a 15- or 20-year, if you want. The upside is if you hit a bump in the road you can lower your monthly payment. The difference in interest rates is negligible.
Real Estate Broker · Franklin Park, IL · Member since 2019 · 22 posts · 16 votes
6y
Thanks Jaysen, I decided to go with the 30 year mortgage. The property is a SFH that I purchased in a judicial auction last year. Like you said, I can always pay it down sooner. With the 30 yr I'm also comfortable with the payment, if I have to make the payments myself. Thanks again Jaysen, I really appreciate your feedback.