Multi-family, multi-lot property NJ

[Guy Henderson]

Hi guys,

I'm a new member and have been reading through the forums and wanted to get everyone's take on the particular issue I'm currently facing.  I am purchasing a property that consists of 2 adjacent lots; the first has 2 separate single family dwellings on it in which I tentatively plan on living in one, the second lot is vacant and i plan on building a single family home on it.  I may sell, rent out, or live in that new single family home down the road depending on several variables.  I currently have enough cash to cover the purchase price, but i will need additional funds to make repairs on the 2 existing units and to build the 3rd unit.  And of course i would like to hold onto as much cash as i can.  

After speaking with several lenders, I have decided my best course of action is to purchase the property cash, and then immediately refinance as much as possible on the lot with the 2 single family dwellings to avoid any mortgage insurance (getting conflicting reports if that would be 20% or 25% down).  Then I can take out a separate construction loan to build a single family home on the adjacent lot so I can pay interest only until the unit is complete.  

I'd love to get your take on what you think the best course of action would be, and if I need to put 20% down or 25%.  I'd like to get your take on living there vs. not living there as well.  Also, would like to get your thoughts on construction loans if you have any experience with them.  I am located in New Jersey.

Thanks!
Guy