if they are pressuring you like this.PLEASE watch the American Greed Episode on Remmington Financial  .not saying these guys wont or don't fund of course.. but when I do my deals with my banks its common that I pay for the phase one and the appraiser directly..  

That’s why I try so hard to explain to people I meet every day the benefits.

A couple questions:1) Has anyone worked with local lenders like a local bank or credit union?

Hey @Jaycee Greene someone on our team handles the acquisition and lending/banking portion, we only do the monthly bank draws for construction costs!

This deal was the catalyst that got me into the mortgage banking industry.

Also, banks typically use a valuation process that does not favor the BRRRR strategy. 

@Hank Bank where are you located?

Sit down with a 1032 Accommodator and have them explain the details of a 1031.   

Should I be concerned the bank may have issues with this? 

In my experience, you can absolutely use hard money in bank owned reo auctions...you still don't generally get access and thus need a lender who does need an appraisal in this scenario.