Confused on hard money and then refi

[Gil N.]

Hello BP members,I'm a fairly new investor.I have one sfh.I bought cash here in Hudson valley NY.I rehabbed myself and am now renting it out,tenants are on their second year lease,things are fairly well,very good cash flow since I own free and clear.Im ready to move ahead.i have so many questions but will ask one for fear of confusing everyone.

So I hear and read constantly that hard money is an option ( or heloc or he,loan)My aim is to buy at least two sfhs at once and rehab and hold.I hear hard money lenders will allow you to spread the down payments on each also supply rehab funding etc.After all is complete I understand the next step to be rate and term refi.My confusion is will it justify doing so even though a conventional lender will ask for down payments and closing costs for each home separately when trying to refi the homes now that they are in good condition?Am I missing something?After the hard money lenders points and interest payments and holding cost etc,wouldn't it be more money out of pocket when going to a conventional lender?What am I missing?

[Rick Santasiere]

Why do you need Hard money of you have the one rental paid in full with great cash flow @Gil N.? Seems to me you can do a HELOC or a HELO, or a straight up cash out refi without HML rates. I am a big fan of building equity into more than one property so that I always have multiple sources of credit available to me quickly and super cheap (4%) You could theoretically (if your DTI allows it and you have a decent in come and credit score), take the cash out from the first property and use that for two large down payments on two new houses, then finance the both via conventional financing. I just think there are more options than just hard money. And heck, I WANT to lend my $$ to people to earn a higher rate of return, but saving $$ is certainly my first choice for the world.. Good luck to you Gil