Private Money to Refi an all cash property?

[Keith Shadle]

Hello,

Do more seasoned investors use Private Money to "fund" their deals after a purchase?  Or, Refi their money back out after the deal has been closed in cash?

Seems doable and easier than paying a large private money operation 2 points, 6% and a 5-4-3-2-1% early termination fee.  Anyone use individual or small org private money at say 9% for 6-8 months to cash themselves out of a deal they already own?

I have two properties I was able to pull down, partly because I was able to move fast with my own cash and not hunt for a lender. My DTI is not great but the properties cash flow is. I should be able to refi after 6months...but I don't want to wait & don't want to do delayed financing at the moment either. Local banks don't seem to want to lend to a out of state investor either (Indy investments and I'm in San Diego). Want to use the velocity of money and keep going!

Having an already cash flowing property (which I do) that can cover the higher interest payment for short term seems like an easier sell for a possible private lender rather than a deal that "looks like it could work."  Could be a way to start growing your money network??

Drawbacks I am seeing are title company fees putting the lender in 1st position for a period of time before you put better debt on the property and then cash them out.  

Do folks do this, or am I thinking too hard?   Thanks!

Keith