The Advantages of a 5/1 ARM

As a real estate investor, you’re always looking for a way to get ahead of the competition. Whatever edge you find can be the difference between purchasing a property and growing your portfolio, or losing out on a deal to another investor. One solution to this problem is acquiring the necessary funds to purchase or refinance a property through a unique rental property financing program such as a 5/1 ARM.

The 5/1 ARM is a 30-year, fully amortized loan program where the interest rate is fixed for the first five years and then floats based on the monthly LIBOR for the remainder of the loan. In this post, we’ll explore what makes the 5/1 ARM such a good fit for you as a rental property investor and how you can use it to grow your rental property portfolio.

1) Lower Interest Rate

One of the first advantages of the 5/1 ARM is a lower interest rate. Low interest rates mean less money each month that you have to pay towards the mortgage. Paying less money each month increases your monthly cash flow from the property, making your investment more profitable. Interest rates for the 5/1 ARM start as low as 5.25%, which is determined based on factors such as your personal credit score and the loan-to-value of the property.

2) Single Property and Portfolio Financing

A second unique feature that’s available with the 5/1 ARM program is the ability to finance either a single property or an entire portfolio of properties. Whether this is your first property or a twenty property portfolio, it can be funded under the same program guidelines. There are no limits on portfolio size, and the program is available to investors of all experience levels. Eligible property types include single family residences up to four units, as well as condos and PUDs (planned unit development).

3) Purchase, Refinance, and Cash-Out Options

Finally, the 5/1 ARM offers flexible financing to help you do whatever you need to do as an investor, whether that’s purchase a new property, or refinance or cash-out an existing property. The minimum loan amount is $50,000, and you can finance up to 75% of the property’s loan-to-value.

Whether you’re a new investor or continuing to grow your business, competitive interest rates and the level of flexibility offered with a financing program like the 5/1 ARM can give you a huge advantage over other investors in your market.

Lima One Capital is the nation’s premier lender for real estate investors. We make it easy to finance all of your fix-and-flip projectsrental properties, and multifamily investments. As a national lender, we lend across the country in 41 states including the District of Columbia.  Our 5/1 ARM rental program is designed to benefit you as an investor and allows you to be set up for success as you grow your rental property portfolio.  If you would like to learn more about our 5/1 ARM Rental program and the benefits that it provides you as an investor, click here.