Then move on to the roof, mechanicals, plumbing, electrical.

He is threatening us with a mechanics lien if we don't pay, or legal action.

If you could have 5% rate then absolutely rate is not an issue.Things that are known:1. we all know about tax rule and how to avoid paying tax by making smart moves.2. we know real estate has price inefficiency where it can be exploited.3. sometimes we as investors are having too much emphasis on market while tax-avoidance is a more key aspect to tackle.

With so much emphasis on BRRRR on the forums, I feel like I'm investing the wrong way.

I made it clear that he cannot put a mechanical lien on that property as that would prevent me from refi.

Not only did I find it easier to land a deal in a hot market [these big players and cash investors tend to stay away from these 100 y/o pre war built homes-- which on top of cosmetic upgrades, need new mechanicals-- and they want quick returns, money in, money out] but I gained valuable, hands-on experience w/ the full-gut renovation and forced some decent equity in the process. 

This degree of safety is why I'm bullish on the city and on the state in general, "Narcos" are not welcome here and the benefits of that are showing in every facet of life here.Yucatan state is projected to be #1 in Mexico for real estate development volume in 2023, with a heavy emphasis on the city of Merida.

As you may know, people are equipped with defense mechanisms that protect them from trauma, and denial is one of them. 

Hippo also threw in a lot of extras such as equipment breakdown (Covers the cost of repair or replacement for pretty much everything in your home that uses electric power, in the event of electrical or mechanical breakdown with deductible of only $500), coverage for home office equipment etc.

Mechanical systems don't always need to be replaced.