Conventional or rehab loan??

[David Sanford]

Looking at a house that is selling for $80k. My guess is it needs about $20k in renovations. Final value will be about $135k. I'm interested in doing the BRRRR method as I think this will be better off than flipping bc I can avoid the cap gains tax and I should be able to pull out enough from a cash out to buy my next property. Question here is this: should I use a renovation loan to pay all the Renovations and downpayment? I would borrow $100k and put down 20% ($20k) so my remaining loan will be $80k. After a cash out I will pull out about $20k. ($135k x 75% = $101k. $101k-80k = $20k i'll pocket). This way is less out of pocket at only $20k oop, but I'll pay more interest and more of a down payment being it's a higher loan. Or Should I use a conventional loan of $80k and put down $16k (20%) and then come out of pocket $20k for the renovations? This route will cost me $36k out of pocket but the cash out will give me about $36k back. Advantage is I will have a smaller loan, so less money towards interest/down payment. Either way I'll get my money back.. just trying to see what you all think. Maybe there is something I am not considering here?