Help with strategy using a Commercial Line of Credit

[Justin Griest]

Hi everyone, 

I currently own a duplex outright currently worth around 65K(Bought for 30K cash, 10k repairs so 40k all in) It is performing fine, about 10% cap rate, it is in an LLC and is located in Kansas. I am located in TX. I was able to set up a commercial line of credit on my duplex through a commercial lender in KS.

I am able to withdraw 48,750(75% of the value) on the LOC and requires monthly interest only payments on the extended balance, and is annually renewable. The rate is quarterly adjusting and is in the 4.75% range

I am going under contract on a 127,500 duplex today and need help with my strategy. It could use some updates, its in an up and coming "cool" area and should be able to rent for about $750 per side once updated. So around 150-160k ARV. For my repairs and updates I am estimating $12,500-15k.

I currently am going with a residential loan, using my LOC as 25% down(though could go to 20), 30 year, 3.5% to keep my monthly payment lower. Also would be using the LOC for the repairs.

I could also go commercial in my LLC with the same lender as my LOC (using my current duplex as collateral) at a similar rate, 5 year balloon, 25% down and amortized over 20 years. I could refinance it out, cash out and do it again, but it would be under my LLC and I'm not sure how to get a residential mortgage on it at that point.

I am stuck on how to proceed? I don't need the cashflow but it wouldn't hurt. I plan to buy and hold as long as it performs. 

You guys always have outside the box ways to go at these so let them fly!  (Hopefully, I included enough info to help with some different strategies)