Buying a SFR with Land and Building an Additional Home

[Shawn Suarez]

I'm looking at buying property with an existing SFR and an acre of land. The property is zoned R-2 which in my area means multiple dwelling units are allowed. The existing home on the property is in good condition and the neighborhood is one we are interested in living in as our primary residence. We are completely new to the home building process, but we would like to build our home on half the property and then would be open to either renting out the existing home or potentially selling it separately.

Has anyone gone through a scenario similar to this and willing to share suggestions? Is it smart to hold the existing property as a rental? Or try and sell the existing home while the market is doing well?