Financing Rental Property, Then Re-Financing to Cash Out?

[Account Closed]

Do people do this? Seems expensive?

Here's my situation:

I have about $40K avail cash in the bank. 

There's a house that I'm interested in that I may be able to get for $80-90K through a relative. Because of my DTI, I will probably only be able to finance about $65K of it requiring my cash reserves for DP and closing costs. Seller-financing is not an option.

The house is in decent, appreciating area, and is worth approximately $125K today. 

I would like to refinance again in about a year to get my cash out, but paying closing costs/fees twice, doesn't seem to be the best use of my money.

What are your thoughts? What do people do in this situation?

I'm totally open to some creative ideas on how to make this work, without making a poor financial decision.

Appreciate your time and thoughts.

[Harjeet Bhatti]

@Elizabeth Mae The only thing you can ask loan discount fee, which you can ask your lender what other way they take out this fee. You can get 20 year or 15 year fix to offset that cost.  Ask your lender which way you can save money.