Buying down interest rate with points?

[Sean Chua]

TL;DR - Is it worth it in this economy to buy down the interest rate with points?

Loan Details: All-in (purchase price+ renovation costs) for $420,000; ARV projected to be $520,000; 70% LTV

Option 1: 6.999% interest; $12k closing costs; would allow me to break even the rent with PITI

Option 2: 7.5% interest; $7k closing costs

Breakeven point: 3 years (34 months)

I'm planning on refinancing the loan later whenever interest rates come back down; is it worth it to keep the cash on hand (probably would invest it in stocks) or pay down the interest rate?