New mortgage with construction

[Neil Manus]

Buying an expensive old home in a hot market for aroud 1 million. We will have a fixed mortage on it with plan to rent it for 3-5 years before demolishing it and building new home. New homes cost 1.3 million to build. Do most people get a construction loan just for the tear down and rebuild (1.3M total), or do most banks / people end up refinancing the total amount for 2.3 million?