They're a smaller community bank so they don't even report subsequent loans to the credit bureaus.

@Jerry Padilla is correct the trick is to put your renovation costs on the HUD and held in escrow you can then instruct the title company to pay your contractor in draws.

Post monthly charges each month and it would draw on the prepaid balance.The prepayment would be marked against Liability account on the balance sheet, not the P&L.Take it this way, if you have 100 tenants and 1 tenant decides to prepaid 1-2 months in advance, are you going to put that money in a separate account and change your basis to accrual?

As closing was drawing near and no funding was available, we tapped into our other business’s coffers to complete the purchase in cash.

You can probably get the acquisition piece, in many instances with just 10% down.Renovate the property with the hard money lender's money (paid back in draws after you've completed the work)Once the property is stabilized (no construction and has a tenant), get a portfolio loan that has low seasoning  and a 30 year fixed option based on the new appraised value.Stephanie

I would stongly suggest you consult with an experienced attorney to draw up the contract. 

I have invested in other states like TX, HI, and IN where the title company simply prepares a subsequent warranty deed into our trust 1-2 days after closing.   

My wife and I are set to move into our new home at the beginning of August, and we are subsequently turning our current townhouse into our first rental property.

During the application Chase asked if I would like an initial draw.

.- Rehab money to fund the first milestone if the rehab portion is paid in draws in arrears. - The purchase deposit - anything not covered by the loan.