Rolling rehab funds into mortgage or paying out of pocket?

[Jonathan Riordan]

Hey everyone, 

I am under contract with my second property and plan to do a large renovation of the main house and the garage apartment that is on the property as well. I have been planning on using funds distributed from a rehab loan that will be rolled into my mortgage payment. I have estimated renovation costs to be around $40,000, but that is me sub-contracting the work. In order to add rehab costs into my mortgage, I must have an estimate from a general contractor and that general contractor must do all of the renovations. I have a quote that will be coming in soon from a GC, but am expecting it to be significantly higher than $40,000. I have the ability to pay for the renovation out of pocket, but was hoping to keep cash available for future deals. Any opinions on what would be best? 

Thanks in advance!