You would instantly save on taxes by moving to another state.

But I really wont have any instant equity.

Your borrower should have purchased a vacant dwelling policy with course of construction and builders risk endorsements, @Raj G. . 

Then I was told by another lender then no I cannot buy this property with a FHA because FHA guidelines are that I could only purchase a mix used property if it's at single dwelling with a commercial space attached to it that is less than 49% of the residential part other property.

Much of the regulation applies to renting out individual rooms and/or short term rentals in an accessory dwelling unit(attached or detached ADU on the property. https://www.oregonlive.com/portland/index.ssf/2018/08/80_percent_of_portland_airbnb-.htmlAs a side note,  CM2 land on SE Belmont is a prime zoning for building plexes. 

@Tony Roddenberry,Quick and dirty answer to your question.If you were able to take the roof off your dwelling structure, pick it up and turn it upside down, everything that falls out would be personal property (free standing appliances, furniture, area rugs, are examples) that could be depreciated over five years. 

If the property is solely tenant occupied you will be looking for a Dwelling/Fire Policy (may be called a Landlord policy or similar name) or a commercial policy such as a Business-owners or Package policy.Most Homeowners or Dwelling/Fire policies include:1.

Yeah Age of dwelling can be a factor but its still under 100 years old.

If your company does not, then you need to switch to a Dwelling/Fire form.  

Therefore the viability of this purchase will primarily be based on the instant equity achieved via the value add.