Construction or hard money loan for 3-flat rehab?

[Phoebe Noce]

I’m under contract for a three flat in Chicago and am purchasing using traditional financing. We had an inspection and it’s in rougher than expected shape — the rehab costs to bring the place up to desirable rentable condition is in the $150-200k ballpark. Although we will have no trouble securing the mortgage, we do not have enough cash in hand to do the rehab.

The property is in a prime area and we've already found success with rentals in the same neighborhood and are extremely confident the cash flow will be very positive. A 1/1 unit in this neighborhood rents for at least $1200/mo or about $3000/mo as an STR.

However, we have found that many of the lenders we’ve talked to do not want to be the second mortgage on the property.

What would be the best course of action here? Find a private or hard money lender?