So people are willing to give an arm and a leg on deals as they probably lost on many offers so they are ready to land a deal.

To siphon the money out of degenerate gamblers' pockets as they curse their luck weakly and yet keep pulling away at the one-armed bandits, oh wow, that's got to be the best feeling ever.

I've heard that the origination points on a ARM make it not worth pursuing, but frankly I don't fully understand that.

Did your agent arm you with this kind of information to set your expectations? 

I would also look into banks who might offer a ARM loan with 5% down to hopefully get you into a lower mortgage rate percentage since you are looking to refinance again in the future, the ARM shouldn't be too much a problem and you might obtain a better mortgage rate. 

The first thing you will need to get your arms around is why the property has such high vacancy. 

A 25 year 5/1 ARM.

No matter what you may read or hear from others, real estate investment is not an arm chair activity like, say, buying a bond. 

Also if you are planning to sell this property fairly soon (5 years or less) there are ARM loans available.

A cash-out will initially have a higher rate because it is a fixed-rate, not an ARM.