The scenario is real, but I'm going to simplify it a bit.Imagine that the house on one side of your current residence comes available.

@Harvey CorsinoA Solo 401k is a simplified version of a 401k designed for owner only businesses.  

The references to the laws above are a very good start, but let's try to simplify.

The more simplified it can be the better. 

If the property fails to close, the seller may be entitled to receive the earnest money unless contingencies for financing or title issues killed the deal(simplified answer)  The typical amount would be $500-1000 on lower dollar sales up to 1% for higher end. 

But you could simplify things by always having the full replacement cost of your most expensive component,the roof, saved up at all times. 

So if you owe the HML $50,000 then your new loan with the "conventional" lender will be $50,000...I'm over simplifying here but I just want you to understand the concept.It is important to be PreQualified with a lender BEFORE you enter the HML.  

You can really simplify your tax stuff starting early. 

Again, simplifying things.Long story short: such a small rate increase will not make a noticeable difference.

I simplified and understand there is a lag in either directions