Should I use private money for a down payment or entire purchase?

[John Valley]

I am presenting to a private money lender this week and basically I can't decide if I should try to convince him to loan the entire purchase or just the down payment. I have done the numbers for weeks now and it seems I will be making more cash flow by just the down payment. 

This is because his interest rate is higher than a conventional mortgage. To simply put:

Down payment option: Mortgage is $1,145 at 4% and his rate is $400 at 8% so total per month is $1545

Total Purchase option: His rate is $2000 at 8% so total per month is $2000

My plan is to refinance after a year or 2 and then pay him out with that. If anyone has any advice that would be great! Also, I was thinking we could buy more properties with the amount of money he would use to buy the whole house and generate even more cash flow!