I'm willing to bet no newly built property would conform to your rule.

Like I said... they are trying to make it conform to FNMA underwriting.

Yes, those are conforming requirements, portfolio lenders will be much more flexible

I intend to finish the attic into a master suite, and add a non-conforming BR/office, LR and bathroom to the basement to more than double the finish sq footage of the home.

- I would put 25% down or whatever % you need to get the home loan amount to the conforming limit, I think it's around $453,000.

HELOC's are just a product of the individual banks that offer them, so they can essentially make up their own rules (unlike conventional conforming mortgages that have to conform to the guidelines established by Fannie Mae and Freddie Mac).I have a couple HELOC's myself on investment properties, and in doing my research I found that most banks want you to be on title for at least 6 months before they'll do a HELOC. 

It is curious, I thought you could get a conforming mortgage.As foreign person, you can try HSBC mortgage, otherwise US micro-banks (the smaller, the better) have portfolio loan department and will lend to foreigners.Cash on cash return is an affordability and solvency measure.

@Mary Jay 10 current conforming mortgages are allowed under fannie mae

Conforming lenders will only lend on warrantable projects.

Older vintage product which would be C and D buildings being by the beach most likely in an A to B location were built on more expansive lots as land was more readily available.In most area land is now at a premium so things are much more compact and tighter.If you have a bunch of land next to the beach you might have a re-development play in the future.7.5% CAP rate on that vintage of a building is pretty weak.Most with that vintage want a 9 to 10% return.To drop almost 133,000 into a property for an annual 5,000 return if everything goes perfect is crazy in my mind.With that much money you should be able to leverage yourself into a much larger project.Given the age of those buildings when you re-model you will have to conform to the new EPA lead certification rules and procedures which run the costs up.What about deferred CAPEX??