If I wait until I'm ready to but I will not be paying interest on money that is just sitting there but at that time the market will be low and I won't be able to pull out as much money.

Broker either doens't know what he is doing or is trying to pull a fast one on you.

I also tentatively plan to refinance in roughly 2 years in order to pull my initial investment out of it (BRRRR strategy with a slower refinance). 

I knew I would want to re-position the property and pull equity out, so the penalty didn't make sense.

You can make adjustments by not pulling out 100% of your cash to the point you have an acceptable Cash Flow.

(House-A)I want to buy another (House-B), and then sell House-A.My lender has pre-approved me or a mortgage for another house (House-B), without requiring me to sell my current house, (House-A)I want to do a BRRR and buy House-B with hard money , renovate and then utilize the mortgage to lower the interest rate and pull out most of the initial investment.If I borrow from the hard money lender, will that reduce my borrowing power for the new mortgage?

@Chase Gochnauer OK, I'm hearing from my lender within 6 months its a technical re-fi and can only pull out 75% of how much you paid in cash.

It doesn't help that the National Floodplain maps are outdated and universally acknowledged to be "politically influenced" (as certain neighborhoods in Houston demonstrated).Maybe it's a bit short-sighted but with plenty of solid places to invest (major cities with booming job markets), it makes pulling the trigger on Florida an unenthusiastic choice.

I've done much due diligence and decided to pull the trigger based on the numbers!

There is also a 1500sqft SFH on the property.They say that the property pulls in 5500 a month.