First one in the books, now what? BRRRR Strategy

[Vince Abernathy]

BRRRR Strategy - First property.... I was unaware about the 6th month seasoning requirement by most lenders, but I found two that would refi after the rehab is completed. What would you do in this situation or is there another option I am not seeing?

Purchase price: $137,500 ($44,000 in to the property... loan at $101,000)
Appraisal: $180,000  
ARV: $195,000
Est rehab cost: $7,500

Scenario #1: 75% LTV cash out refi at 4.25%...
Cash out: $45,250
$6,250 still in the property.... principal and interest $719/month
Cash flow estimated at roughly: $250/month

Scenario #2: 80% LTV cash out refi at 4.25%... 5/1 ARM mortgage. Prepayment penalty appears to only be in the first 3 years.
Cash out: $55,000
All money out plus roughly $3,500 in pocket.... principal and interest $767/month
Cash flow estimated at roughly: $200/month
My plan would be to refi around year 4 or so before the adjustable rate kicks in.

Is ARM too risky or my plan should work roughly as expected? Did I miss anything on the ARM? Any help is much appreciated! Thank you