You can do a 12 month cash out bridge which will pay off your old loan and get you funds to do the rehab as long it appraises high enough

Using your own funds to pay down your loan so you get a bigger loan sounds like a zero sum gain (aka IE using 1 dollar to pay down loan so you can net 1 more dollar from the new proposed loan) So how are you going to net more cash when spending 1 dollar to get another 1 dollar ?

Even though interest rates and terms won't be as desirable as conventional, you'll have an easier time getting pre-approved.

People think it's inexpensive to install a Washer & Dryer, but getting the gas, electrical, water, and drain/vent there is usually quite expensive.Here in Chicago, we always want to be at the top of the market regardless of the competition, so we almost always install a W/D when we renovate our properties, even in some of the less desirable neighborhoods.

LOC on business purpose doesn't really make sense from a lenders perspective.Think about it, you have to tie up funds and not earn a return until the borrower wants to use them.Time is money and if your lending money you want a return each day your money is out.I'd strongly recommend just going with a cash out refinance and avoid spinning wheels looking for a LOC. 

Remember its an Investment Fund.

So you are putting in various inputs/assumptions, like gross revenue (total sales prices of homes) less soft costs, hard costs, city fees, desired profit margin (i.e. 15% of gross revenue) = residual value (what the land is worth).

Aiming for each part of the business to eventually fund itself is a solid plan, and a real estate CPA or attorney could help fine-tune everything for taxes and structure.

If you plan to live in this home for a few years:Look at the time it takes to recoup your funds.

I have an occupied rental i am trying to off to fund a renovation if anyone is interested-1072 bellows!