loan, hard money, and refinance

[Mike Goikhberg]

I'm wondering if anyone in this forum has done something along the lines of what my partner and I are thinking of doing. We put an offer in on a property of 80k in as is condition. we plan to put 80-90k into it, and expect a conservative ARV on it of around 225k. We want to do the initial purchase of the property through a community lender with a 20% downpayment. After this, we plan to use either hard money OR a service called Sprout to provide the loan for the rehab costs. Once the rehab is done and the property rented out, we plan to refi with another community bank that does not have a seasoning period requirement. I'm still new and this would be my first deal, so I'm a little hazy about the actual mechanics of the refi process. As I understand it, if the bank refi's the property at 75% LTV, that would be about 168k that's available to cover the original purchase price AND the costs of rehab. What I don't get though, is how does the hard money lender actually get that $ if it's tied up in a loan with the bank?