BRRRR with a rehab loan

[Olivier M Ouedraogo]

We are under contract for our very first rental property. It's SFH, 3 bedrooms/2baths located in Norfolk, Virginia.

Price: 130k

Repairs: we budgeted 40k. First time so no idea on how to accurately do this. Inspection scheduled for next week so we will know more. 

Financing: investor rehab loan at 6.99% with 20% down, 30 yrs. We are hoping to use a HELOC on our primary residence to finance it. Our local credit union offers a 2.5% introductory rate for 1 year.

Rent: $1700 using Zillow last week. now it's estimated at around $2000 on Zillow. BP shows $1750. We used $1700 for the analysis. We will contact a PM tomorrow for more accurate data

Now, the problem, it doesn't seem to work for a BRRRR using a rehab loan since the rehab cost will be rolled into the loan. We want to be able to pull out the money to be able to buy another property.

Not sure if we should pursue it with the rehab loan or look for a hard money lender, use the HELOC to rehab and refinance to pull out the money.

Anybody has experience doing BRRRR with a rehab loan?

Thanks for your time.