There is a rehab component to your project. Just curious, is the rehab time because there are tenants already in there? If you go with a construction loan your interest will be 10%+ interest-only for the duration of the construction but then you can tap into that forced appreciated without either 1) financing the $60,000 out of pocket (e.g. driving down credit score making refinancing more difficult) 2) having a pre-payment penalty (fairly typical for long term investor products).
What does this mean? Acquisition interest rate should be adjusted to somewhere in the 10%-12% range and loan amount $156,000 (for 24 months). You should expect to bring 20% to close (although if it's a discounted property you may get away with less) + closing costs + 2%-4% of the loan amount for closing costs. Down payment would be more like $24,000 + closing + fees ( total cash to close for conservative calculations more like $33,000) compared to $70,000. Monthly interest-only payment $1,558 + insurance + taxes.
For the refinance, you should adjust loan amount to $180,000 (75% of 240,000, you may be able to get 80% depending on state). You should bump that interest up to 8.5% for conservative underwriting in a long term increasing rate environment. This will give you an P&I of $1,352, factor in taxes and insurance.
Just looking at numbers posted, would be glad to discuss what those numbers mean for making or breaking the deal. Hope this helps.
