As for holding a home and building another one - be sure to include carrying costs of the first home while building the second.  

Now we are mostly scaling our business with larger communities but I've used many different creative finance strategies including seller finance, private lending, hard-money, collateral from other properties, and lease-options. 

However, before you do so you should ensure that your revenue from rental income covers ALL your property expenses in the townhome, including mortgage, taxes, insurance, maintenance/repairs, vacancy, property management, etc...

In order to move back into the home, the homeowner would need to reinstate or payoff the loan, including the costs of the receivership as permitted in the order.

SOLD comps vs ACTIVE is very important. 

For example, include thoughtful amenities like a welcome basket, free snacks, or local guidebooks.

It is so important to vet the people you work with.

Partner Driven covered 100% of the financing, including the $220,000 purchase price.

If maintaining strong cash flow and minimizing risk are more important, Option 1 is the safer choice.Good luck! 

However, the right Broker is very important when first starting because they can train the agent how to run their business and find success.