Repost: Rehand and Refinance Question From Newbie

[Ryan Perkins]

I'm reposting this question because I made the mistake of posting on Thanksgiving day and didn't get many responses... 

My question: Would it be a good strategy to finish my basement using funds from a zero-interest credit card, then refinance/pull out the cash to pay the card off and rent out the property?

The details: I'm looking to turn my current primarily residence (a single family house) into a rental. It's a 3 bedroom 2 bath with a partially finished basement. I'd like to add another bedroom/bathroom and complete the living area in the basement in an effort to increase the overall value as well as the amount I can charge per month. The problem is, I don't have the cash for it. I do howerever have a zero interest credit card. I also have access to high quality flooring at wholesale cost as well as the ability to do most of the work myself.

What I'm thinking may be a good option is to fund this work using the zero-interest credit card, then refinance, pull out the forced equity to pay off the card and then rent out the house.

I purchased the property 7 months ago for $195k. It appraised for $200k. I currently owe $187k. Based on comps, I think I could force the value up to around $220-225k.

I'm a newbie and have never refinanced before so I could really use some advice/feedback. Is this a good idea? Am I going to run into problems with loan to value? What pieces of the puzzle am I missing? Thanks in advance!