Looking for financing ideas for a first time property purchase

[Joshua Nudell]

Hello BP community,

I am a new real-estate investor, but have always been interesting in real-estate as a means of achieving financial independence and security.

I have recently begun researching properties in Northeastern Pennsylvania (learning the rental market, home values, economic situation, etc) and have recently found a property that I feel would be a good first start for a buy & hold.  I have made a cash offer for the property, which has been accepted and the inspection has turned up some minor, but expected issues, and no major issues.

My question is, what is the best way to pull my cash out the property after I have renovated and fixed it up and have it rented out?

Here are the property details:

2-family unit (side-by-side) with two 3 bedroom units.
Previous rental income of $750 per unit.
Purchase price: $70,000 + associated closing costs (approx. $74,000 all told)
Taxes: $1640
Water: $600/year
Sewage: $360/year
Insurance: not sure yet, $1200?
Separate meters for gas & electric. 
Separate hot water heaters.

I will put about $20,000 into renovations to get the units rent-ready.  I'm not sure what the property will appraise for after renovations, but I estimate in the area of $125,000 - $140,000.

At that point I will be into the property for $95,000 in cash.

Doing the research on traditional financing  I have discovered that I have two options (three if I declare that I am owner-occupying the property); 1. Residential investment mortgage or 2. Commercial mortgage.  One of the problems I encounter when researching mortgages is that a lot of lenders don't deal with mortgages under $500K for commercial, so any leads on lenders that will work on small mortgages will be appreciated.

If I say I am owner-occupying this property, then I can qualify for certain refinance options with cash out (most conventional being 80% LTV maximum, with FHA maxing out at 85% LTV with the current rules).

I don't mind having my money tied up for a short period of time, but I would eventually like to move on the next property once I'm finished with getting this one rented out. I have not closed yet, but I have to buy the property in a cash purchase (could probably arrange a HML until I secure financing, that's one way I suppose.)

Does anyone have any recommendations or suggestions on how I should eventually have this property financed?  Ideally I would like to have 0% - 5% of my money in it, but with the cash offer, some of the purchase loan options that usually provide this level of personal commitment are off the table, right?

Thanks for reading!  I look forward to reading responses from more seasoned real-estate experts!

-Joshua