Forced appreciation, appreciation, tax savings, principal paydown and (the most valuable in my opinion) experience. 

Here's a casein FL - Seller in foreclosure has 120k principal @4%, Shes 10k in arrears, house is worth about 250k, good condition.She wants to stay at the house, but doesn't mind selling it if needed.She will likely not qualify for a loan mod at the moment, good amount of equity.She works in the medical field, just took sick and fell behind.I was thinking of offering to pay her 10K in arrears and creating a 2nd mortgage @ 10% interest.if she defaults, i can foreclose,  as there is a bunch of equity there.any thoughts of a better scenario that i can make more of this situtation?

If no construction lender can get comfortable with you as the builder (aka principal, sponsor) regardless of you hiring a well-qualified GC, then maybe the solution is to give some piece of the equity to another builder/principal who would oversee the GC, and whom has the track record to satisfy the lender.

It may sound like a long time, but real estate is pretty much the only investment where you can generate cash flow, build equity with principal paydown and grow your net worth.

Now its 2024, and I have around $300K in principal left on the loan. 

Maybe you have a couple losers where you lose 10-20% of your principal, which even in the worst case of two 20% losers that’s 40% of 5% which is 2%.

That isn’t a lot of money to buy real estate with, but it might be enough to do some private lending with and grow the principal that way.  

You will then have a few options with that rent money....you can put it into principal or you can start saving it to purchase yet another property.

So, for as long as the note we hold doesn’t pay off, we collect $10,722 monthly interest and pay out $4,100 on the underlying note - of which prox $2,000 is interest with the balance principal reduction (since our note is interest only this represents note equity buildup).  

ASk them if that E&O covers you when you are the principal in the transaction.