Dilemma and needs advice!!!!!

[Tyler Merrell]

Here is my situation. I want to start investing and have land and time to do so. 

I currently am looking at too options. 

1) Build a new home that will appraise for about 110-120k with an FHA loan and live in it for a couple of years. I will be able to build this house for about 45 k (My family doing all the labor and using our connections and getting materials at cost) then with the money that we would have paid a contractor build a second home to rent.....

2) Build said home^ and pay off my existing mortgage on my house. I owe about 50 K Currently. I then will be able to tap into my mortgage and get an equity line and can possible build 2 homes. 

Which option, and if I go with option 2 what type of equity loan is best for this? LOC?