Financing rehab for house hack

[Shuvrajit Mukherjee]

I aim to find a fixer upper quad/triplex in Chicago area, renovate and house hack, then cash-out in 6-9 months.
But when financing my other rehab or cash-out projects, I have seen the lender requires the property to be non owner occupied. 

How can I finance the rehab? And if I go for conventional lenders, and pay for rehab out of pocket, what's the usual seasoning period to cash-out?

[Andrew Postell]

@Shuvrajit Mukherjee ok, I'll answer this in 2 stages if you don't mind:

First, you can purchase a rehab a primary home with a traditional mortgage.  These mortgages work similarly to other loans in that you wrap the rehab into the new loan and make payments to your contractors in stages. However, there's one really nice benefit - no large downpayment.  So, where an investment property would need 20%-25% down...this loan would only need 5% down...or maybe 3.5% down...depending on what loan you use.  And since you are coming out of pocket so little...there's not really a need to refinance.  We refinance on our other properties to get that large amount of money back.  Here, you don't have that need since you didn't come out of pocket a large amount.  Now, let's say that in 2 years rates decrease....then yes, refinance.  But we aren't going to refinance and pay all of those closing costs again unless there's a real benefit to it.

Now, the second thing I would like to point out is that buying a primary home that needs NO rehab will also have a downpayment of only 5% or 3.5% down.  I'm saying this because your ability to choose a house is SIGNIFICANTLY higher if you just pick a house that's already on the MLS and you negotiate with the seller. Meaning, if you are shopping for a house right now...you're the only one doing so! Seriously, just about all the purchase contracts that we see these days have seller concessions on them. If you can just choose the right house for you, negotiate a good deal, and not have the risk of renovations....that's not a bad thing.

Hope all of that makes sense.