how to get my cash back on this deal?

[Rigo V.]

I am looking at a property that I think I can get for $135K and its should appraise around $170K. I was thinking of going in with the 20% dp (Mortgage would be for $108K) and purchasing it. I would then do a cash out refi at 80% ltv  fixed to get back some of my cash. Property would still cash-flow well. 

Is a LOC a better option? I am trying to avoid silly fees but dont want to leave my dp into the deal. I also don't want to run the risk that the interest on the LOC will skyrocket.

Any advice?