Best purchase scenario

[Aaron Moore]

Just closed on my first property and I'm looking to purchase my next one in the near future. I'd like to get some advice how I should purchase the second one. One thing I'd like to mention is that I have full access to a HELOC which is approximately 57K. The LOC is in my grandpa's name but he is allowing me to use the funds since I'm the one who is making the payments on it. I already started the loan process with Marine Bank in Bloomington, IL because they have actual investment loans which only require 20% down as opposed to 25-30% everywhere else that I've looked. My loan officer said that underwriting won't accept a gift as a down payment so the money + reserves would have to be transferred to my account and it would have to sit there for a couple months. The properties that I'd be able to buy outright in my area all need extensive rehab done. My question is which scenario would be best:

1. Transfer money + reserves and wait 2 months

2. Buy a property for around 30-40k outright and refinance in 6 months(they'd refinance for 70% LTV)

3. Try to get a hard money loan for a 12-18 month term and refinance after

Any input would be greatly appreciated.