Deal Structure?
I was running some numbers to determine how we can best structure a deal to keep our capital in place yet still have some cashflow. In the area I am looking most CAP rates are pretty thin, 6-7%. I was looking at rates and came up with an idea of funding the purchase using a 5/1 ARM with 5% down instead of 30yr fixed with 25% or 5% down. By using a 5% down with an ARM we still see some cashflow while freeing up enough capital to purchase 5 properties instead of 1. My CoC ROI would be much higher as well, thoughts?