Mechanics to funding a live and flip and paying off the loans!

[Marc Estepa]

Hey BP fam! I am stalking a home we will be using as our primary residence that will need some updating. My initial plan was to get approved for an FHA 203K loan to fund the rehab costs and everything.

After seeing the state of the hot market here in Tacoma, WA - I learned that the best way to compete with multiple offers is to forego the FHA 203K and to go with the conventional loan.

As a result, I'm now trying to figure out the mechanics of funding the rehab and paying it back. My initial plan was just to work it all through the FHA 203K loan.

Borrowing money seems straightforward enough. I'm primarily looking at the following options: credit card, personal loan, borrowing against my ROTH, TSP, HELOC from rental property, etc.

Sorry in advance if this is a stupid question or not - but how does the refinance work to pay back the loans?

If I use a credit card or whatever to fund the loan with the intent to pay it off right away - how exactly does that work?  

My train of thought is now to do the rehab quickly and do a cash out refinance once it’s complete to pay off the rehab loans.  Is that train of thought right?  Is it that simple?  How does this work with capital gains taxes if I finish the rehab in under two years?  Is there a better way to do this?