Cost of construction is expensive and about to get worse.

I know that interest on the acquisition loan can be included in the cost basis since it’s inventory.

The 2-3% points in extra cost are worth it if you plan on using as I described above because the use would be for a few  months at most and due to that short term use you can survive a rate adjustment up.But, if you have no plan to payoff the debt like when using for a down payment on a long term hold why pay the extra cost for flexibility and have the additional risk of the adjustable rate with the amortization looming when you can get a fixed rate second mortgage. 

Any particular reason you've chosen this market from all the way in San Diego? 

Screening everyone over 18 helps reduce the risk of costly evictions and ensures you’re fully informed about who will be living in your property.Additionally, be mindful of the number of occupants and how it might impact your property.

For example, this investor that I met recently said not to buy properties at tax auction for 100+ different reasons.

If you don't want to finance the other projects then you should consider your opportunity costs.   

A great REALTOR will help you gather rental history and the cost to own and show you good sites for pulling rental projections, but you will need to do your own calculations.Everyone's mileage varies.

Happy to help should you need any cost segregation advice.Cheers

I tend to over research, which is one of the reasons I love notes.