Patrick Senas First off my hat goes off to you.

If you get too chummy with them, it becomes difficult to put your landlord hat back on when the rent is late or when they are having wild parties at all hours of the night or are now asking for things that your lease did not afford them.  

Put your architectural hat out of the way and think like an investor. 300k spread is a lot, at closing on a 1 year hml, might be about 60-70k in misc exp, and the rest is hard const and profit, you're at 230k on both.

@Jayme Jahns I intend to buy more rentals in the future hat will most likely provide little-to-no cash flow. 

I had to put my real estate broker hat back on and am looking for investment ideas that will generate income again.  

If so, and it's favorable, then I can refi-cash out and use hat money for the repairs.

New cost = $10,750 = 10.75%For the pain and suffering of proving to an entity that I am credit-worthy I charge $2,000 an hour to gather my finances and put hat in hand.  3 hrs min. 

I wear many hats :) What part of VB are you buying in?

@Bruce Clark  You could use steel studs or hat channel as furring and shoot them to the wall.

I was thinking of 7% but I kind of pulled that out of a hat and I don't want to overpay.