However, they didn't discuss how the student was able to raise another 40K (which I'm significantly concerned about lending 40K from a hard money lender and pay APR 20%).Second Day,They told us that they were giving out a bonus session for early comers.

I like the idea of a hold back until the punchlist is complete, but that doesn't prevent an unscrupulous contractor from stealing the initial deposit...

You can refinance into more traditional loans later, but that initial speed matters.

Keep in mind that any initial rehab costs are on you until you get your first draw.If you can get work done quickly, some lenders I’ve worked with can inspect the property the next day and wire funds the same or the following day.

I recommend you pay him the final amount, but get a lien release, in advance, that says if you pay him this final amount, he will have been paid in full for his work and no further liens can accrue.I believe a mechanics lien once filed generally initiates a court date to substantiate the claim.

Quote from @Brett Jurgens: @Jay HurstThanks for responding3.75%, 30yr fixedLike others have said, with that interest rate your best bet is probably to do a home equity line of credit (HELOC) to put towards an investment that you can quickly recoup your initial investment on.

Happy to talk further on the area (we are large enough to offer options to focus on student rentals/UW Madison campus, and anything from Class C to A locations or suburban/surrounding communities) but to help you consider broad initial search, you could start by deciding how important cash flow is. 

Also be aware that cash out refinances typically have slightly higher rates than initial purchases or just rate and term refinances.

Real estate investments don't require a huge initial financial outlay, and you may benefit from ongoing cash flow or appreciate your asset's value over time.

Initially after management fees, repairs and PMI i was losing about $250 per month.