How to best use cash and refi for my recently purchased property.

[PJ O'Connor]

I recently purchase a foreclosure at 391k. Comps in the area are b/w 550-650k. It obviously needs some work but its got great bones, a new roof and a new furnace. I am selling my previous property which will leave me with approx. 75k to work with. I was hoping to put that money down on the new place to lower my monthly mortgage payment (paying PMI with current mortgage), but the timing of the sale couldn't work out. Once my sale is finalized, I have the option to either put approx. 40k more down and get to my 20% to lower the monthly payment or I could put it all toward renovations. I am leaning toward the latter, but I want to know how I could use a refi to improve my monthly situation. The improvements should significantly appreciate the property.

Improvements that I would make: new hardie-plank exterior siding; new exterior doors; new flooring in a few areas that did not have it; new deck (needed) and possibly updated master suite. 

Looking for advice on how to use refi to my advantage over the next 12 months.