Creative investment proposal: What do you think of this deal?

[Stephen Hood]

I have a property that I want to move into and  purchase but am running into a challenge with the offer being contingent on selling our current property. So I had an idea to get a loan from a Private lender for 400K (just under the asking price of the home) this house is already appraising for over the asking price but need some TLC. 

I would give the lender a 1% origination fee and payback the interest on the loan in 2K/monthly payment. At the end of the 12 months, I would refinance at 500K after fixing up the property and investing the profit from selling my current home in the new property. (I think this is realistic because many property with the same sq footage in the area with upgrades are going close to 600K). I would pay off the remaining 416K by getting a mortgage and hopefully have about 100K in equity.

Anyone have thoughts or holes in this idea?