Ultimately, it's about you and what works to give you enough comfort and protection from all the unknowns.  

I was hoping for some magical, unknown way in which something like this would work. 

The new squatter law is for “unknown” people that break into your property and begin taking up residence. 

The local HML can usually pull the trigger much faster than an outside person does because more research has to be completed to asses risk in lending for that area.This is why local HML lenders rates might be lower than a national HML lender that prices a few percentage point higher and one to two points more to price in the unknown factor of the area.

What a lot of investors don't grasp is when you go with an unknown this is what happens a large majority of the time.

We do have a couple unknowns though.

You either pay for a house with dollars or dollars + stress + worry + hassle + unknowns.

However, two things that are a big unknown and was wondering if this would automatically disqualify me... 1) I had a foreclosure on a condo that finalized in Feb 2019, so more than 5 years ago. 2) I work for myself and been doing this officially for 1 year only (prior to that I had a high W2 job).

Couple grand maybe, unless there was some huge unknown problem that couldn't have visually been identified walking through the property.

Here are some considerations for each option:Option 1: Using the HELOC for a down payment and renovation on a second property to rent:Pros:You can leverage your existing property to acquire another investment property without selling your current home.Rental properties can provide a steady income stream and potential long-term appreciation.You can use the HELOC funds for renovation, which can increase the property value and rental income.Cons:You'll have to manage the property yourself or hire a property manager, which can be time-consuming and add to your expenses.There is a risk of vacancies or unexpected maintenance costs, which could impact your cash flow.You'll have to pay back the HELOC, which will increase your monthly expenses.Option 2: Building a new house in a new community and selling it for a profit:Pros:You can potentially make a significant profit if the market is favorable and the property value increases during the construction period.Building a new house allows you to customize the property and potentially attract more buyers or higher rents.Cons:This strategy involves a higher level of risk, as you're betting on the market to appreciate in a relatively short period.There are many unknowns and potential delays in the construction process, which could impact your timeline and profitability.You'll need to have a good understanding of the local real estate market and construction costs to ensure that your project is profitable.Before choosing either of these strategies, consider the following:Research the local market conditions in Chandler, Arizona, to understand the current demand for rental properties and new construction homes.Consult with a real estate agent or investment advisor who has experience in the local market to get their insights on the best strategy for your situation.Evaluate your financial situation, including your income, expenses, and risk tolerance, to determine if either strategy aligns with your goals and financial capacity.Consider the tax implications of each option, as this can impact your overall profitability.Create a detailed financial plan for each option, including projected income, expenses, and potential risks, to help you make an informed decision.Ultimately, the best strategy for you will depend on your unique situation and goals.