Quick question for deal analyzation

[Gary Garrett]

I'm trying to get my first deal closed and have two options.  First, the deal:  A forclosure down the street from my house that would be a great buy and hold or flip.  It would have maybe 10-20K equity after renovations but would also cash flow 300-500/month all with conservative numbers.  It needs about 30K of work and purchase price is 102K.

Option 1: Follow through on my current course of financing which would wrap in 20K of the repair costs into the loan for a cost of an extra $4700.  

Option 2: Pay cash for renovations and have to cough up the 20K out of pocket, but save the $4700 it would cost to wrap in the mortgage.  

If I do option 1 and wrap it in, my reasoning was to keep more cash on hand for future deals.

If I do everything out of pocket, it would stretch me farther than I wanted but it's doable.  However, I'd save about 25% of the 20K I'm trying to keep in my pocket right up front.  

Long term goal is to pay for kids' college.  I want to have about 300-400K that is liquid in 20 years.  I'm thinking I should flip this house and take the 10-20K and my initial investment and then look for the next deal.  I guess my main question is, Does it make sense to save 15K oop by spending $4700?  Or should I just go for it and do the repairs cash?  I'm looking at this as an OOP expense of around 60K and then renting the home with approx. 4-5K cash flow per year as the worst case scenario.  This would take me about 10 years to recoup my money if I stayed that course.  I appreciate your thoughts.