Questions about hard money and buying property

[Brett Davis]

So the other day I had an idea and wanted some feed back. I was wondering if it is possible to purchase a property with hard money and turn around the next day and refinance it with a refinance mortgage. Is this possible? What would be the drawbacks to such a deal (If it is even possible). Thank you in advance.

[Andrew Syrios]

It would certainly be possible, the problem is the cost. Hard money is generally expensive up front, somewhere between 3 and 5 points. Traditional loans also usually cost a point. And then you have two sets of closing fees and what not. If you need the hard money loan to repair the house so you can refinance and then hold it, that's one thing. But if you're going to do the traditional refinance right afterward, just do it up front and skip the hard money.