Creative strategy for building on a busy street?

[Sarah Lorenz]

I'm looking at some lots on a busy street in a good area. I'm a little reluctant to build and sell because I'm not sure about the market for a 300K+ house on a busy street. I'd really like to get 350K+. If we can come in just under 200K on construction on a small house, I think we could get close to 1% on rents--maybe $1900? The zoning is for single family, but there is a real need for affordable housing in the area. ADUs are allowed for owner-occupied properties, but building with an ADU might make it too expensive for the target audience who might be willing to live on a busy road. I'm wondering if it would be possible to sell them with owner financing so people could buy the more expensive house and get two years of rental income on the books and then refinance? That way I could get the profit margin I need and also help a few people get a house with an income stream? Or does anyone have any other great ideas on how to approach the opportunity?