BRRRR a Duplex - Financing Via Hard Money & VA Loan

[Chase Stocki]

Backstory:

I'm in the military and have access to the VA loan with allows 0% down on a SFH up to $400k, a duplex up to $600k, and a quad up to $800k. The catch is the property must be move in ready and the VA sends inspectors to the property to ensure that it is. I have not found a clause that allows me to buy a property that is not move in ready and fix it up myself.

The Problem:

Houses in my area are extremely overpriced. There was a rise in the market during an oil boom, a massive flood, and people bought homes due to the lack of available rentals. The market has corrected itself, but the property owners have held tight to the prices so they don't lose money on their homes when selling. Therefore, in order to buy, I'm either going to over pay for a move in ready home, or purchase a fixer-upper. 

The Proposed Financial Solution Oversimplified:

I purchase a fixer-upper 'duplex' with a hard money loan (I'll do my homework and work the points, interest, and rehab into the loan), rehab the 'duplex' to my liking, move into one of the units (house hack) and rent the other unit, then use my VA loan to "refinance" the property with 0% down and low monthly payments (probably around 5% with my credit score hovering around the 800 mark).

Without getting into the VA loan weeds, is my proposed solution even legal? Does anyone know of anyone who has done this sort of financing for a home/multi-family?

All advice is greately appreciated.

Respectfully,

Chase