On a Fannie Mae loan, your scenario has a major Loan Level Price Adjustment (LLPA) of 4.125% for a second home with a loan to value of 85.1% to 90% plus a hit of .75% and another for .25%.

Through agency debt at ~67%, pref equity from an institutional investor and common equity from our investor-partners.

If I get stuck with the storage cost in that scenario it is MUCH less than a $100 fine per day for a month ($3,000). 

One last thought applies to a scenario where there is a lot of equity in the existing home even if the developable parcel is excluded.

**Due-on-Sale Clause**: The existing lender could call the loan due when the property transfers ownership, though this isn’t common if payments are made on time.2.

I've heard from several people who thought they had an owner finance agreement signed at the kitchen table, assumed they were paying down equity only to have the house sold right out from under them.Ben,  How common is this that a seller is willing to give up their deed upfront in exchange for seller financing.  

A new loan officer or one not familiar with DSCR might offer you the best interest rate and fees on a DSCR loan because their pricing engine told them, but your specific scenario may not fit. for example, a deal I am currently working, First time investor, First time home buyer, living rent free, seeking 80% LTV purchase, Using Short term rental income to meet DSCR, with gift funds. 

Understand the contracts you sign and how each detail of the investment can be effected in each scenario.

Then there is a central system that is outside of the doors on the ceiling if one of those in the common area goes off then it sets off the alarm for the whole building.

Hi Morgan -It sounds like a DSCR portfolio loan might be a good fit for this scenario, given the rental income and the potential for self-management.