Your desired unit count might narrow your search enough to evaluate everything coming your way.

Apparently our DTI is too high for the HELOC so we can do a cash out refi but that is less desirable because it means we cannot then get the loan for the rental property despite having 25% down.

. - The suburbs and areas with desirable school districts are HOT.

Also there is this fear like high density housing might make the neighborhood less desirable and dilute the privileged status.

I do like the desire to build unique, a unique new construction unit will do good in most markets. 

Although I have submitted one offer, I'm not confident it will be accepted.My primary challenge has been the high asking prices for most of the homes I've considered, which make it difficult to achieve a desirable return on investment (ROI).

But the key here is to have a desirable property that will cash flow. 

Apparently our DTI is too high for the HELOC so we can do a cash out refi but that is less desirable because it means we cannot then get the loan for the rental property despite having 25% down.

I know this isn't the greatest time to get into the market and am well aware that Santa Fe is VERY competitive and low on inventory but my life/career is dictating decisions more than the desire to grow a portfolio in hotter markets (for now). 

Desirability, yes.