Question on doing a tear down project

[Nick Causa]

Probably a silly question and the answer is right under my nose but: how does it work when you purchase a “tear down”. If I’m putting 200k (30% down) in on a tear down because it is in a great location, and i knock it down, how does the financing work to build a new construction there? How does the 200k get rolled into the building costs? Or does it not? I’m familiar with the BRRRR strategy as I’ve done one before but this seems very different. I assume you buy it, knock it down, get a renovation loan, build the house, and then when its done you contact the bank to put a mortage on the new build and reimburse yourself? Is the 200k just looked at as the lands purchase?