The investor promised to return their $25,000 plus an additional $10,000 when they refinanced the property with permanent debt. 

The interest-only balloon of 3 years with a buyer option to extend for 2+ years will give you time to secure permanent financing.

VA loans would be on the permanent side of lending, not the construction side.  

With that flexibility, you'll also have access to your property for vacation until you permanently move.

(It'll be different 3 months from now, lol) Anyway, I just heard today that the Nubs Nob ski resort in Harbor Springs is closed permanently.

Adding it to land on a permanent foundation does preserve the value however.  

RVers, and bikers.I will admit, my permanent home is only about 4 hours from Angel Fire, and I really am not a fan of New Mexico in general.

The capital gains just go into the next property, they don’t go away permanently.

If youre really worried about the rate differential, just buy it down to match what the rate would be for a primary residence product when you put permanent financing in place and mentally account for it as a Stay Out of Jail fee. 

Just make sure you know how your going to setup your take-out/permanent financing before you start this process as cashout refi's for conventional have seasoning requirements now and delayed financing has rules and timelines as well.