Hybrid Flip to Rental....Any critique?

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Hi everyone,

Here is a plan that I came up with that I plan on executing very soon and would love any and all thoughts on how well it will work.

My wife and I need a place to live so my thoughts are to be able to live someplace that is also an investment for us. I originally thought about buying a multifamily and living in one unit and renting the rest out but the mortgage we qualify for right now does not give us enough capital to do this.

My plan now is to buy the absolute worst house that I can that is still in livable condition and eligible for traditional financing and rehab it while we live there. Once the rehab is done I was planning on refinancing our equity out, moving, and using it as a rental.

In my thinking in the big picture I would basically get the house for free because once the rehab was done, I could pull out all of the money that I have in it and turn it to passive income through renting it. Not to mention it would give us a place to live for a while.

The only thing I can really see that would throw a wrench in things is a seasoning period that would be longer than what we were hoping. My goal would be to get the rehab done in 3 months but I'm just concerned that I would have to wait a long time before I could refi.

Any thoughts or critique on if/how this might work?

Thanks BP!