Hard Money versus Bank Financing

[Lee Schram]

I wanted to get your thoughts on whether to use hard money or bank financing on this deal.

The estimated numbers are purchase price $69,000.  

Rehab estimate is $50,000

After repair value is $180,000

I believe this can get done in 3 months, but I am projecting 6 months to be safe

The hard money lender can lend 90% of the purchase price and 100% of the rehab amount.  The interest rate is 11% per annum and interest only payments, no pre payment penalty.  2.5 points

The math that I calculated on this is:

$62,100 loan of the purchase price

$50,000 loan on the rehab

$112,100 total loan

2.5 points= $2802.5

6 month interest payments= $6165.5

6,165.5 points +2,802.5 interest payments =$8,968 

10% of purchase price down payment=$6,900

Total amount=$15,869

Bank financing the bank wants 20-30% down and I'm estimating 5% interest rate

20% down=$23,800

30% down=$35,700

6 months interest payment= $2,975

20% down total=$26,775

30% down total=$38,675

What is the smarter play here? 

Use other people's money and pay the higher interest and points, or use my own money and go with bank financing and pay less interest?

Thanks for your advice