Buy all cash, rehab, cash-out refinance, rent?

[Matthew Wikler]

I am currently considering the following path for a potential investment:

1. * Purchase a condo (~$150k) all cash, 30 days to close (MV around $160k)
2. * Closing costs roughly $5k
3. * Put $15k into rehab (~$190k ARV)
4. * Cash-out refinance (pull ~$150k out) (est. cost $5k)
5. * Rent the property making positive cash flow

The end effect (my hope) is ~$25k net invested in property ($150k paid + $15k repair, +$5k closing - $150k cash out), $40k in equity, positive cash flow, mortgage paid down each month by renters. I'd then plan to repeat this process multiple times to accumulate a portfolio of rental properties.

My purpose for paying all cash up front is to obtain the property at a discount for (a) an all cash offer and (b) a fast close. Additionally, my hope is that this will save me cash on the initial close process (instead of paying at purchase, and at refi.

Outside of the obvious that there will be unexpected misc. costs, some longer term repairs, management fees, etc., can anyone help point out some potential pitfalls with this plan?

Thank ou!!