Need some input!

I have two houses in a very successful town in New Jersey.. taxes are grandfathered in and super low in a high end town. I saw this as an opportunity to purchase single family and rent due to great schools and no available rentals in this area.

My first purchase was for my personal use which I plan on renting out eventually. I purchased for 225,000 a few years ago before the inflated market and put 20% down. My mortgage is around 1,200 and I could rent it for $2,400. It’s a 3 bed 1.5 bath.

My second purchase was last year- .5 miles away from my home. I bought the property for 190k put 20% down and now rent it for 1,875. It’s a 2 bed 1 bath and my mortgage is $1,025. It was a turn key property- super nice inside.

I just tied up a similar property and this is what I need input on.

It was listed for 199,900. I have it tied up for 166,500. Home inspection went very well. I spoke to my loan officer and I’m doing a renovation loan. They are lending me about 58k and my final loan amount will be around 235. A home like this can sell for about 260-270 in this area. My question is- my mortgage will be around 1,300 but the interest rate on this loan is pretty high (4.8%) and I can only rent it for about $2,100-2,200 max. There are also fees affiliated with this loan- around 4K plus higher closing costs. My plan would be to hold on to this house and keep it in my portfolio. Is it worth me using a renovation loan like this? Or is it too risky? What are the downsides of constructing a deal like this?

I had to get creative in this market in order to get a deal. Turn key is too competitive. And this home was listed too high for its condition so I was able to negotiate it.

Obviously if I had the cash I wouldn’t take advantage of a loan like this.

Opinions???