Id keep looking if it was not an approved short sale ( even an approved short sale takes a very very long time and theres no guarantee that you will even close on the house after months of waiting). q1)There are plenty of non traditional lenders that could offer you construction financing if the numbers make sense but it will cost you with points and a higher rate.

.- Large remodels or construction projects (Live in Flip) can be self-managed, worked on directly, and the value add, after 2 years, is largely tax free up to certain limits. - Many areas around the country allow for ADU Construction - house-hackers enjoy similar benefits to remodeling projects by being naturally on-site for ADU construction. 

However, the journey has been anything but smooth, and we are now at a critical crossroads.Despite securing approval for our 42 townhouses, the soaring construction costs have made the project financially unfeasible.

I'm a real estate investor specializing in STR properties, a realtor, and I own a construction company.

They currently have over 10 under construction in the Los Angeles area.   

A HELOC offers flexibility and lower interest rates, which can be ideal if you’re looking for short-term financing with lower payments during construction.

If you decide to sell one of your houses, it could be an excellent opportunity for an investor looking to capitalize on the strong demand for student housing in the College Station/Bryan area.As a real estate investor, realtor, and owner of a construction company in College Station, I'm happy to help in any way I can.

Further enhancements included constructing a back deck and repainting the interior to modernize and enhance the home’s appeal.

I think you've forgotten about the concept of Constructive Receipt. 

note if we sell the primary residence, it is very likely we will not need mortgages to buy smaller rentals as we would use that mostly.Though I take your point on keeping it. our house was a new construction (3 years old) though so possibly low maintenance risk to keep for a rental.