Pay with cash to get a better deal, do a home equity loan later?

[Benjamin Andrew Pogue]

Hi all,

I have a deal that I am working on and wanted to get some ideas. The house is listed at $144k and ARV is $160k. In order to get a cash on cash return of at least 10% I need to buy at $120k. House needs new paint and drywall but in overall good condition- lets say $5k for repairs. My dilemma is this:

I can purchase the home with cash if I need to but I understand the value of leveraging OPM.  Should I just pay cash for the property so that my offer is more likely to get accepted(this is a foreclosure) or should I just finance at 20% down?  It is my understanding that I would be able to pull my equity out of the home by doing a Home Equity Loan so why wouldn't I just pay cash now and the refinance later to get my cash out of the home?

Let me know your thoughts.