This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.

Let's assume your expenses (mortgage, taxes, insurance, maintenance, vacancy, etc.) comes to a clean $600 and the property rents for $1,000.

I just learned that builders risk and liability insurance coverage can cease once a CO is issued for a new build.

That is unless you have a JV or other equity partner who is putting up the funds immediately with no lien, title insurance, etc.

However, before you do so you should ensure that your revenue from rental income covers ALL your property expenses in the townhome, including mortgage, taxes, insurance, maintenance/repairs, vacancy, property management, etc...

Insurance and LicensesThe Subcontractor agrees to maintain:General liability insurance of at least $[Insert Amount].Worker’s compensation insurance (if applicable).All necessary licenses and permits required by law.6.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid.

Most Florida markets will share some dynamics though like taxes and insurance. 

Here in the USA you need what's called a "construction loan" and it's also very hard to find a company that will insure you if you're a newbie.