My parents live in Prescott, Arizona and it seems to be an area that has continued to boom, has low vacancy rates, and a bit of a shortage of rentals.

The next would be an attorney, to be honest if no cash for keys will resolve the issue..

I'm always up for a coffee date to talk about goals and next steps, don't hesitate to reach out! 

Someone will likely not have an overlay like what you're referring to, but min loan size may be an issue.

The type of the property you choose will definitely be an advantage.

Somewhere like the Florida Keys would be an example of where this would not make sense. 

As Jay mentioned, a conventional loan could also be an option for you.

I think you are right on both your assumptions  and they both should be an easy fix.   

You may find using an IRA owned LLC to be an easier path to buying and holding the property. 

If you have  / can find suitable land (topography and zoning can be an issue), have access to the necessary capital (more expensive), can be more patient with the timelines (new builds will take quite a bit longer, especially on multi units, and dont' forget to factor in possible weather delays), and enjoy the process of designing something from nothing - GO FOR IT.One big caveat: make sure you have the RIGHT General Contractor who really understands new construction.