@Leeling Chew @Joe Funari nailed it.

I'd look at the experience as tuition that will allow you to make better decisions going forward, most notably not biting off more than one can chew...not an unusual young person thing...ask me how I know.

I don't want to bite off more than we can chew with managing a full reno while we learn the ropes. 

The reason is that you have less risk (hopefully) and you start learning without biting off more than you can chew.

And stress that chewed into our mental, emotional, and financial health.Five months passed.

And by not biting off more than you can chew for the rehab.

As is, unless you have a game plan to cash flow, you may be biting off more that you can chew.  

I couldn't risk this.I have about $3500 in repairs that are well beyond wear and tear -- smashed out windows, dog chewing of window and door trim, destroyed wood floors.

By the time you take out a trad. cash-out refi, you'll be eating a bunch of fees, which will chew into your theoretical 5% arbitrage spread. 

And when it does move up it also hurts the borrower by likely reducing his home’s fair value if he were to sell.Let’s say a borrower wants a $600k house and is chewing on fixed vs AIO.