Get Delayed Financing, then subsequently get cash-out refinance?

[Jeff Kelly]

Let's say someone pays cash for a property (and for the rehab) and then gets Delayed Financing for 70% or 75% of the purchase price (and rehab) soon after purchasing. My question is whether that person could then get a conventional refinance at some point later on for 80% LTV. And how soon could that cash out refi possibly be done after getting the Delayed Financing?

If someone pays cash and intends to rehab the property, delayed financing can get him most of his cash outlay back. But it can't get all of his purchase price plus rehab costs plus the equity he added, as could be possible in a normal BRRRR refinancing.

But could one do a quick delayed finance, get some cash back, rehab the property and add equity, put a renter in, and then refinance to basically get all his cash back? Or is there something about getting Delayed Financing that would prevent the ability to get conventional refinancing soon thereafter? If nothing would prevent that, then is there an amount of time the investor must wait between delayed financing and cash out refinancing? 

Forgive me if I'm out of bounds thinking this way, or if I'm being redundant. But I imagine for people who are relying on using, say, HELOCs for acquisition and rehab, it'd be great to be able to use "Delayed Financing" as a way to quickly get 70% of the purchase plus rehab price back so they can quickly pay back most of the money they took out of their HELOC. But, after having taken care of that immediate concern, it'd be even greater to then be able to get a regular 80% LTV cash out refi (after whatever seasoning time is required) on the very same property, because that would allow them to include the equity they've added, whereas that added equity (added via performing the rehab) is apparently not able to be included in the Delayed Financing's LTV. Does Delayed Financing include early pay-off penalties or something? Thanks for your thoughts on this.

Hypothetical Example: 

1) Pay $70k cash all-in for purchase and rehab. This money is taken out of a HELOC.

2) Get Delayed Financing at 70% purchase + rehab = getting 70% of 70k, or $49k back. 

3) Pay that $49k back to the HELOC to vastly reduce that balance. Keep paying the monthly interest payments on the remaining balance of $70k-49k = 21k. Put a renter in the unit.

4) Wait 6 months or 1 year for seasoning, and get a regular 75-80% LTV cash out refinance. Say the property is assessed at 90k. The investor would get 75% of $90k = $67.5k back. In the process, I imagine the $67.5k would have to first pay off the Delayed Financing loan of $49k. That would leave 67.5k-49k = $18.5k. That $18.5 thus would represent tapping into the equity that has been added.

5) The major benefit would be being able to reduce one's HELOC balance greatly almost immediately, and to also soon thereafter take advantage of borrowing on the equity that has been created.