Financing or Cash Purchase ???? BRRR

[Cassidy Burns]

Hi BP, 

Curious as to what other members thoughts on this are:

5 Unit Purchase

Has been vacant for 2 years so purchasing at 16% Cap Rate ($89,000)

Have the option to purchase with bank financing :

-5.77% 

-5/1 ARM w/ 20 year amortization

-20% Down Financing

-$30,000 needed for purchase

-$17,800 down payment

-$2,000 closing costs

-$10,000 construction budget.

OR.....

Would you purchase w/ 100% Cash for ease of refinance / getting long term financing on the property once stabilized (area typically sells at a 10% cap) 

Essentially what I am asking, would you go with bank financing at first knowing you are going to want to do a cash out refinance once you are stabilized and have a solid NOI or would you purchase with cash knowing it is going to be easier to refinance in 12-15 months?

Thanks BP!