Funding my first multifamily development. How should I do It?

[Billy Rogers]

I recently purchased my first investment property in the San Diego market. The current 5/2 SFH sits on a large lot, zoned multifamily, currently cashflows as a student rental.

Monthly Mortgage, Taxes, Insurance: $4,200
Monthly Rental Income: $6,250

I have a mortgage balance around $730,000 and the property comps come in around $900,000-950,000

Mortgage Balance: $730,000
Property Value: $900-950,000

I am in the process of getting building permits for the following mix of units - unit 1 is the current house, being downsized from 5/2 to 4/2 in order to make room for another unit

unit 1: 4/2 1200sqft  
unit 2: 2/1 850sqft
unit 3: 4/2 1200sqft
unit 4: 4/2 1200sqft
unit 5: 1/1 600sqft
unit 6: 1/1 600sqft

I estimate this development to cost around $1-1.2m, and yield rents of $18,000/mo or $166,800/yr

The ARV of the property I am estimating to be around $2.8-$3.2M, conservatively. I honestly think it could be closer to $3.4. (edit: grammar)

The problem: I don't know the most effective way to finance this project, especially given the amount of "dead time" between building and renting.

Once the rents start coming in, I'll easily be able to cover my debt obligations, and have significant cashflow to boot! I'm guessing I'll do a jumbo refi on the whole thing once fully built.

So... any suggestions for navigating the finances for construction?

The "ideal" loan for me would be one that considers the ARV of the property based on the city-approved building permits I will have, and has an interest only-option that I can use during the construction phase. This is my best proposed solution currently, but would love to hear other ideas!