Poke holes in my plan

[Alan LeMay]

Good afternoon everyone! I would love it if people could give me some advice or poke some holes in the plan I have laid out for myself.

BACKGROUND

Under contract for 2 lots across the street from each other in Colorado with beautiful views for 130k total. I put 40k down for this, both lots are on the same loan. 

I have a house about an hour away that I owe 690k on and would probably appraise for between 880k and 940k. 

I have about 30k liquid after putting the cash down for the land. 

PLAN

I plan to take a HELOC out on my house and use that money to build a short term treehouse type rental on one of the lots. I've been in touch with a builder for this and expect the total price to come in around $500K. We then plan to either sell our house and get a VA construction loan on the other lot and build there or if things go really well with the short term rental keep the house and use the cashflow to build another short term rental on the other lot.

Our other idea is to start by getting a VA construction loan and building a house on one of the lots and then selling our house and building one cheap enough to keep a bit of the equity we currently have and using that to build the short term rental later.

Again I would love it if someone could poke holes in this. I've done a little research and have seen you can get up to 95% LTV on a HELOC but haven't talked to a lender about this yet.

Thank you!