New construction or purchase multifamily?

[Christin McKamey]

Hello! I'm hoping to get a little advice from those more experienced than I. =) I own a small SFH that is paid off and worth around $85K. I also own my current home outright which is worth $280K. I'm thinking of either 1) buying another property (possibly multifamily), OR 2) adding another level on my husband's building (he owes $100K on it). If we go this route, we would build two 1000-square foot apartments, or a commercial space. There are other high-end apartments in the area and it's roughly 3/4 mile from a great downtown.

So first I'm wondering, which would you suggest for a semi-new investor? I'm leaning towards putting on the addition since we already own my husband's building.  I feel like it might be a good idea, but I've never been involved in any type of construction deal so I want to make sure I'm not getting in over my head.

And second, as far as financing, would you advise that I take a HELOC out on my current residence? (Sadly, I haven't been able to find a bank that will do a HELOC on an investment property). I also have about $15K cash right now and plan to have another $20K by the end of this year so I'm not sure if I should wait a bit until I have more cash on hand. (Note: I also have another $25K emergency fund but I don't want to spend that).

Any tips anyone has is GREATLY appreciated! =) Thank you.