Financing new development w/ equity

[Gary Smith]

Hello. I’m new to this forum. I recently got into development, so I’d like your input on my 1st project.

My investing partner and I built a house for $500k. It Appraised at $700k.

We’re thinking of refinancing the construction loan to an 80/20 int only.
80 @ 7.2%
20 @ 10.8%

We’d get $250k cash-out to pay off debts and buy land for another new house.

I'm living in the house now; We’d sell the house after 6 months (1 year after acquisition of land = .05 Capital Gains tax).

What are your impressions of this scenario?
Are we missing anything?
Is this better than a Heloc?
What things should we be concerned about?
Are there better options?