Given this new information, I'm considering whether it might make more sense to opt for a conventional loan instead of a hard money loan, due to the lower interest rates associated with conventional loans.

Our current mortgage is a 30 year conventional locked in at 2.75% and the monthly payment is roughly $2000 ($1000/person).

My journey has been anything but conventional, and I’ve built a career that merges my entrepreneurial spirit with a strong work ethic. 

Due to the closing deadline/home condition, I am looking to use a private lender for the purchase instead of conventional from the start.

Plan to eventually cash out refinance with conventional loan in 12 months, but looking to get out of my hard money situation to save on holding costs.

I would prefer not to open a conventional bank account if I can keep things simple.

This is a single family home and was originally a primary residence before turning it into an long-term rental.Some strategies I'm considering to grow my portfolio are using a HELOC/1039 tax exchange to purchase a second investment property/multi-family property or refinancing my current investment property into a conventional loan to utilize another FHA loan for a primary residence (with the idea of eventually turning that into another long-term rental).I currently have a 7% interest rate, and am considering refinancing in the coming months if/when the rates drop.

Why not 5% down conventional, seems like that works with the available cash and closes this at $100K. 

It sounds like you are running into hurdles with conventional financing. 

Conventional Mortgage 5% down and 4% interest rate.