Because I do not have an extra 15K to be able to pay for that on top of rehab , down payment , closing costs etc.

The general contractor proposed $13k for the whole roof replacement with IKO material (can upgrade to Timberline HDZ for $500 extra)  and 10 yr transferrable workmanship warranty.

If you are concerned about the PMI fee, you can always make extra payments and REFI once you move out to lower your mortgage. 

Is the worst case scenario that you cannot refi and have to hold for an extra period, or is it that you are borrowing the funds and lose money because you are out 50k for the rehab/refi?

How difficult is it to get a hard money loan for a distressed property in a rural area (let's say with a 400 square mile area county that has a population of 100,000)?

You can have little rewards along the way, like an extra vacation or a nicer vacation, but I wouldn't start spending like a millionaire until you're a millionaire.

I wanted a larger down payment to be easier on me financially, but I would rather have that extra 11.5% sitting in a bank account and slowly drain it to cover the difference between my monthly expenses and rent.

The extra people would get discovered by city hall if a neighbor turns you in.Be a good neighbor.

A good rule of thumb is to compare the extra 5-10% down you are doing and the monthly payment with the higher interest rate.

So you may be looking at paying 10-20k to get 10-20K actually out so 30-70% on the money you pull out plus interest and payback on an extra 30K plus 80% ltv is often a higher interest rate at 75% you would not be able to pull any money out with a 20% increase.