You can house hack the other rooms.

I love the idea of flipping houses and I love finding good deals.

These days, it seems like people are coaches/mentors who used to flip houses and haven't actually done a deal in ten years, if ever.

I have 2 options:- finance the construction pre-selling the apt, and take my profits (expected to be around 700K pre-tax); or- finance the construction with a 6-7%/year loan (collateral = my house), keep the 10 units, and once the building is completed in 24 months, rent them for circa 180K/ year gross.

These are multiple assets of all sorts of things, retail, houses, condos, office. 

I want to refinance it about 12-18 months later into a bank loan. pull out money to pay off the HELOC and enough for a down on a 2nd house or duplex.

I was involved in two small infill developments in Michigan (about 15 houses in total) so two very small parcels. 

Memphis has a pretty affordable housing market and tends to offer solid rental yields, which might align well with your goals.Let me know if you need any more info or want to chat further about this.

I understand that of course that would bring higher paying jobs but how does that drive the housing prices up.

The house was a 3 bed one bath.