AZ has some very stringent construction defect suits and is the hardest state to procure GL for a GC.So you are taking an extremely high risk by working with uninsured contractors.

Or get the property in my hands, do a few more deals, maybe flips to get some more liquid cash, or connect with a private investor or a builder/experienced investor who knows the ins and outs to do the construction on 2 potential luxury single family homes (comps in the area are between 400-700K) or 4 townhomes (comps around 325-450k in the area)), and actually build on the land.

Or get the property in my hands, do a few more deals, maybe flips to get some more liquid cash, or connect with a private investor or a builder/experienced investor who knows the ins and outs to do the construction on 2 potential luxury single family homes (comps in the area are between 400-700K) or 4 townhomes (comps around 325-450k in the area)), and actually build on the land.

To pass on any and all wisdom I have the luxury of gaining here to all deserving ears.

We have one roommate living with us.My thoughts are to remodel the current house add a master suite to the bottom of our split level foyer.

Dark click engineered hardwood on the first floor and the second floor or carpet on the second floor.I plan to resell, and this is a prime location, so I need to have a "luxury impression".

So I would go with the option that is most suited to how much time and skill you want to spend on it, and how much risk you are willing to take on.

Yes, you are correct on your 1st question, if the 1st mortgage is the one foreclosing, AND properly names the 2nd in the foreclosure suit.  

Pics are time stamped and have the GPS location in each picture as well.I want to dissuade them from trying to file suit against me, as it still takes time and hassle to fight, though at this point I've already compiled most of the evidence.

I get at least 2-4 offerings every other day or so from various brokers.Now for opinion and advice:Not everyone is suited to owning communities.