In need of some advice

[Adam Avinger]

Thanks for checking to see if you can help... I do need some advice. First a little bit about where I am at.

1 week ago, my wife and I closed on our first BRRRR property. We bought a SFR that also has a detached garage with 600sqft apartment above it. We got into the property for 120k including closing, and loan fees. The structure of the closing is a 6month, interest only, balloon. Which means in 6 months we owe the entire nut of the loan. The 6mo balloon, also came with some extra cash to do the renovation. The way it was pitched was that we, the buyers, would get up to 80% of the ARV of the home, so that we could buy and flip, or buy and restructure to hold. We had the appraisal done and it came back back with an ARV of 215,000. Our estimated rehab costs are about 24,850. putting us at 144,850 on our loan.

70% LTV is 150,500. My question is would you personally just restructure as is for cash flow? or do a cash out refinance? I feel like half of cash out refinance would likely be eaten up in the loan fee's and closings would it not?