What do you think of this plan?

[Dave Blackman]

Hi REI experts and aficionados alike!

Have a deal brewing, but it'll take some creative financing and wanted to get your thoughts as I've never done any deals more complex than a standard conventional 30 year loan, or a rehab for that matter.

A reputable contact is getting rid of one of their holdings as they are raising some cash for other investments.  Offered me this deal:

• House is located in nicer KCMO suburbs and easily comps at 112-120k
• House in need of about 23k in updates/remodel (they would perform)
• Has current renter that has been there 15-17 years but would probably need to leave for rehab (lease is up early 2017)
• Offering me value purchase price of 83500 (over 10k less than comps minus repair cost)
• I would get portfolio loan with my local bank there (already approved) at 30% down ($25050)
• Would open a HELOC to perform the rehab (max $23k)
• Once complete, get a cash-out refi (with same bank), at 80% LTV of (hopefully) new value of 118k which would cash me out 24k -- enough to pay off the HELOC
• Would put back on the market at 120k, and if sold would net 25k+ on the deal, otherwise could continue with prior renter or find new renter (pretty easy in this area)

Obviously quite a few things would have to go right including the reappraisal, but the comps look pretty easy to obtain that new value.  Also I'm wondering, if I plan to resell immediately, whether it's worth doing the REFI -- and only go that route if I'm holding for another year, since that's just another 5k in closing costs "wasted".

Appreciate any thoughts on the above!