The bank also requires the contractor you hire to be properly licensed, insured, and bonded.

With that being said, there is no reason you shouldn't do it IF it meets YOUR goals.If that's what you're going for I would look into a loan product called a HELOC all in one (in some countries called a bond access) .

Bears are sounding the alarm about many markets: foreign markets, bond markets, private tech equities, commodities, etc.Real estate may prove to be the lesser of many other evils, and market pull backs can provide investors with buying opportunities. 

I had a similar situation and ended up posting a bond with the city building department to guarantee the work would get done. once they had that, they stopped bothering me about deadlines

Payoff of Installment Land Contract RequirementsWhen the proceeds of a mortgage loan are used to pay off the outstanding balance on an installment land contract (also known as contract or bond for deed) that was executed within the 12 months preceding the date of the loan application, Fannie Mae will consider the mortgage loan to be a purchase money mortgage loan.

Research the returns of these vehicles to determine how competitive your deals are from a yield perspective.Publicly Traded Large-Cap Dividend Paying Equity Securities - ~2% yield10-year US Government Bond - ~2.4% yield30-year US Government Bond - ~3% yieldFor investors seeking capital appreciation, they will be comparing your deal to some of the investment vehicles listed below.  

Isn’t that a junk bond fund?

Bonds are upside down.

Filing a lien or going after someone's bond is another very slow and uncertain way to recover payment.I'm sure an experienced contractor could match any investor scar for scar.   

Then again, coca cola and other blue chip corps are issuing bonds at 2.8% and restructuring long--term/ issuing new debt right now at the lowest rates in history.