Rehab Financing Strategy Help

[Carl Rowles]

We bought this rental in the fall and had it rented. Pipes froze in December and it flooded. We are about to put in $15-$20k of our own money into it, beyond what insurance covered and I need help deciding how we should finance it. 

Opt 1) utilizing our savings in the brokerage account and emergency fund and pay for it all up front.  (We have ~$17k in a brokerage account that was going to be part of downpayment on next investment property, plus we have about $12k in an emergency fund)

Opt 2) Personal loan finance, 9.99%. Based on the CU's loan calculator, we can finance that over 60 months for a $320 payment. 

If we rent the unit at $1,425, I have an estimated monthly cashflow of $302 (rent at $1450, cashflow is $325) I DO include vacancy, repairs, and cap exp in my Box2 Expenses. (Previous rent was $1,300 but we're about to put in a brand new kitchen from the studs, new flooring throughout the house, new furance, adding A/C, etc).

So do we just pay for it all upfront and mostly drain all of our savings, or do I let the rent pay for it and utilize our other savings to get a second property this spring/summer to increase our cashflow? (As I write all of that, I think Option 2 would be better, but throwing it out there for those with more experience).

[Carl Rowles]

I also realized last night (after I made my original post, of course) we could do a HELOC on our primary residence. Thank you!