Here's my advice since I've actually purchased and rehabbed investment properties and am also a Realtor. The fact that you've already purchased the home eliminates that option of obtaining an FHA 203k rehab loan which would offer you rates much lower than a hard money loan since it is an FHA loan. Also, since you've already purchased the home, many hard money lenders that I know of probably won't want to finance the rehab since they will not be holding the mortgage and have a security interest in the property.
Those would have been your 2 most obvious options with the FHA 203k loan being the more cost effective choice since hard money loans are expensive and can charge anywhere from 10-18% interest and anywhere from 2-5 points. They would also require a nice down payment.
Therefore, my best advice to you would be to refinance the home using the equity in the home. Many hard money lenders finance anywhere from 50-75% based on the after repair value. However, the challenges I predict you going into is a lender who won't want to finance the property because you own it outright. Also, from your perspective, if you refinanced it means that you would now owe some debt on it based on the amount of the equity you took out for the financing.
That's why I also advice my investor clients to be as liquid as possible, keep your cash, and pursue the most cost-effective financing options.
Hope this helps. Let me know if I could help you beyond this.
Fabiola Fleuranvil, MBA
South Owens Realty (formerly Re/Max Marketplace)
Specializing in investor properties, first-time home buyers, foreclosures, relocation buyers, and resales.