If it truly is just the paint and carpet and outdated but functioning bathroom and kitchen, a conventional mortgage should work as long as it appraises at the right amount, right?

The house was appraised for 400k, he refinanced 70% so he got 280k loan. 

I live in a smaller and older suburb of Fort Worth where I am less likely to get tracked down (I see evidence of work on properties all around me that are clearly not permitted or up to code), but also know that the specs on the house will change with the appraisal district once I get the property refinanced. 

I would also have a good appraiser to an ARV apprasial so you know the numbers all work  IE land costs and build cost and then there is significant equity still there. 

You could also offer to pay for a home appraisal and agree to pay the property's fair market value.All the best!

. - Two appraisals.

Many lenders will require seasoning (ownership interest) for a minimum of 6-12 months to utilize a new appraised value, but many will permit a cash out refinance using the purchase price anytime after closing.

So, if they say 75% LTV based on the appraisal that would be $108,750 on the loan amount.

Quote from @Jacob Sherman: ground up construction is always much cleaner . in a fix and flip there are many unknows that may pop up after the demo stage is complete  this guy knows what he's talking about. forget fix and flip. new construction also appraises 20% above at least existing depending on age plus land cost is cheaper and less competitive, especially in markets like columbus 

My last project just appraised for $193k and generates $2,400 gross monthly rents (duplex).Google the "state of the city address".