Whatever I do, I would need to do with a HELOC—effectively financing 100% of the property (down payment and closing financed with HELOC, rest of purchase financed with a mortgage). 

If not, they may consider building the ADU and down-sizing into it and renting out the main house.

Just want to mention that sometimes it works out better to raze an existing property down to like 2 studs and rebuild around it so that it still is classified as a remodel versus a complete new build. 

@Anthony MillerYour property management experience is a major advantage as you start investing, giving you a head start with tenant screening, lease agreements, and maintenance coordination.

You could also use a Fannie May Home style renovation loan which a conventional loan and require 5% down vs.

You end up having to sell to someone with higher down payments, better credit, better operating plan, and 100% investors who never want to pay top prices.  

They were already headed to FC, so in a sense they have nothing to lose...

I know an investor that might partner with you on the lot next door and/or may buy your lot without the title policy.I have already got the deed for that lot and another lot that i bought.. the second one is not waterview but it is .694 and soon to be listed on the MLS for 18k.. im still waiting for the lady to come and see hers and say shes ready to sale.. her family was affected by the hurricane and hopefully she will be able to head this way soon.. ive started to try to wholesale here in jasper and have several deals lined up but cant find any investors in my area looking to buy.. i just now saw this or would of replied along time ago.. i dont know how to do the mentions with the @.. every time i try it dont work 

Hi Aaron, I know I wasn't the original poster, but we did end up doing new construction down there in the past year (also purchased cabins before deciding to build). 

For example on your $400K sale it might look like: 20% down of $80,000, 65% LTV 1st of $260,000, and a 15% 2nd of $60,000.