Cash vs. Hard Money - IRR vs actual real Dollar return?

[Scott Randall]

I'm an agent/investor in the Tampa Bay area and was recently having a spirited debate with a colleague over the use of Hard Money vs Cash. With hard money you have fewer dollars in the deal and therefore increase your IRR dramatically (and in some cases reduce your risk). Cash is capital intensive but nets you more real dollars.

Example: $130k pp / $40k rehab / $225k expected ARV. You have a little over $200k total. It's all the money you have. You have enough to take down the deal and some in reserve for the unexpected. Do you pay the 2pts and 9% ARV (plus add. loan fees, taxes, etc) and net less actual dollars, or float the deal cash and make more $$$?

***Note - we are assuming you can only do one deal at a time either way. You don't have the time or labor to do multiple deals at a time.   

Which would you choose and more importantly WHY?! TY in advance