We spent money on the inspector, the appraiser, and the lawyer.

I considered ordering the lender's inspection/appraisal, but this wasn't an option because the water and electricity are currently turned off, and HUD won't turn them back on until I have submitted earnest money of $2,000.

I would then plan to use this forced equity (since I plan to buy a fixer upper) to invest in another home.I have been constantly reading to househack right into the MFH, but this may take some time for me to acquire the money and purchasing power.

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If you've made upgrades and you put 10% down, surely you can get in to conventional and drop your PMI- that is going to save you even more on top of a lower rate. 

When you say you are paying them - is this money going directly to them or into an escrow account?

I have purchased a set of 4 properties in Salem NJ and need to refinance them all to pay off private money lenders.

My money patner (and friend) provided all of the money.

If you form an LLC you can use hard money for rehab projects or DSCR 30Y rental loans for stabilized rent ready properties.

And also can save a lot of time!