On my end I’m showing a 2.01% cash on cash return with $105 monthly cashflow with as is rents. taxes being 5900/yr repairs & maintenance 8% cap ex8% vacancy 5% management 8% My main concern is that when I do wish to cashout refinance (6-12months into the deal) with a traditional bank to pull my money out of the deal along with get a lower interest rate, the 5% prepayment fee will bite into my profits a bit too much

I don't have any direct experience with real estate investing but I've been inspired by the amount of internet research I've done, talking to a few friends, and my readings (i.e How to Invest in Real Estate, Rich Dad Poor Dad, 12 week year, etc.).I'm interested in initially just buying a house and renting it out to a few people, and then eventually getting into BRRRR sometime afterwords.Would love to connect with anyone out here!

Insurance was more than double what the other places I have in the same area cost (they are traditional homes). 

If you build good rapport and find someone who is not in a huge rush, you can definitely use traditional financing.

Thus were going  to buy 1-2 homes the traditional way and get cash flow going. 

Remember that you're not gonna get rich off of a single property.

I am working with an investment group who provides Private interest rate of loan,the interest seem to be higher (4.5%) than then traditional 30 year loan for investment properties(3.25%), it obviously  doesn't sound beneficial ?

If your going to use financing i would also strongly suggest finding a great bank that offers both traditional and Non/QM Portfolio loans. 

My question is if it is possible to use traditional financing to buy the property for $100K, then after closing sign a promissory note with the seller for $450K.

Like most, my interest got kickstarted from Rich Dad Poor Dad.