Good ARV Opportunity - Looking at Financing Options, Limited Cash

[Leah Burns]

Hi BiggerPockets Community!

My husband and I purchased his mom's house in October 2020 for $189K with a VA loan. We were not very educated about real estate investing at the time and we started renting it for some passive income in Dec of 2021 after some minor renovations (bedrooms, bathroom). The estimated value on the house is currently $260K "as is" but we want to finish the basement and add a half bath, which we are estimating would bring our ARV to $300K (after looking at comps in the area). We don’t have a ton of cash on hand for the renovations (est. $30K) and our credit isn’t stellar - our bank told us a HELOC is not a viable option and recommended a cash out refi. Would it make sense to do a Cashout-Refi now to cover repair costs and then try to do another Refi on ARV later? What would our best bet be for creative financing?

Any advice is appreciated – we are a young team hoping to start off real estate investing on the right foot. We both have learned SO much over the last 6 months listening to BP and being apart of this group. We have a good opportunity on our hands and want to do it right. If you've made it this far... well, thank you!