I am new to real estate investing and was looking into taking a heloc on my primary to purchase land and do a construction loan.

Hello, I am a new investor primary looking at the Columbus Ohio market.  

Im amid the pre-qualification process at a local bank, and heard back that the lowest down payment they offer for a primary residence loan on a small multi-family property is 15%.

They are on primary residences only though so not sure if you were looking for that or for an investment. 

Some alternatives that I have considered is purchasing a single-family home, living in it for a year as a primary and then moving and renting it out, or looking for a single-family home with a decent-sized basement and converting that into a unit.

This is technically your primary residence. 

we have a primary fixed loan plus an adjustable heloc.

The other option is to form an LLC prior and both go on the loan in terms of dual borrowers so that the land is used from one owner and the assets or cost to build is coming out of the other partners funds.If you do not own a primary home you can build a home with as little as 3.5% down but cannot use an investor for that option. 

While I prefer to see properties hit the open market as that's often where the most value is realized, I have seen deals that made sense for all the parties involved that did not hit the open market.For returns, commercial investments do operate differently than residential, and the primary difference I see is the emotion vs. numbers of the deal.

If you lived in your primary residence for the last 2 years of 5 years, you're eligible to sell it and pay no taxes on the first $250K for a single person or $500K for a married couple.