Using a hard money lender means you have to work harder to find better deals to offset the cost of the cost of lending. This takes more time, also costing you more. In a lot cases, if not most cases, the deeper the discount, the greater the risk.
You have to ask permission often time to get draws on the loans during extensive rehabs and basically have to ask your "daddy" if you are okay and if you can continue.
Using your own cash is less paperwork, which means less time, too.
As far as being smart about risk, I think you are being too clever for yourself. If you rehab a house and its a flop and not a flip, I doubt you will just say, oh well, let it go. The repercussions of that decision not only equal getting blackballed fromm HMLs, it will be a real forclosure on your credit report which will get you blackballed from consumer credit and mortgages and possible have negative affects on your business depending on how it is structured.
So in reality, you will end up paying points and fees and penalties out the arse to the HML over time until the house finally sells because it will always be better to pay an extra 2000 dollars to avoid a foreclosure if you can afford it. And that will be your "business decision" come that time. Garaunteed.
If you use your own money, your money is tied up for a few months until the house sells. If it doesn't sell right away, you are not enslaved to a lender.
Further, it appears to be a pattern that the most successful and wealthy investors LEND their money as HMLs. That means they are using their own money and not using HMLs. Think about that. As a car wholesaler, how likely are you to take out a car loan to avoid risk?