Then there's misaligned incentives players in the construction industry may make more money the longer a project takes to get completed. 

@Jay HinrichsI agree that deposit banks still actually holding the Notes (there still is a secondary market for nonconforming notes) have an incentive. 

I think the biggest benefit of it though is having access to the LOC.

This was during the biggest run up in RE prices since FOREVER.

The main property will be my primary residence.My biggest question is, what kind of foundation would you use, (that is to code and will pass inspection/permits in Charlottesville) that is either relatively easy DIY or cheap to outsource.

If you are borrowing for renovations, you will likely have a draw fee in the $100-300 range per draw.Selling costs: biggest one is commissions.  

This is a good incentive for them to pay on time.

What are the biggest pitfalls I should look out for? 

It's the biggest unit of the 4 with the highest rent.What can I expect with this tenent?   

Rent out to roommates so I employ the "rent by the room" essentially.Pros:insane cash flowif your room offer is much better value than other places to live, tenants will stay awhilea small community can be built when your tenants become friends with eachothernever ending supply of tenants (at least in my area)Cons:CAN BE management intensiveWILL BE management intensive until you gain experience and know how to manageIf you employ this strategy, the BIGGEST risk/liability mitigator is being VERY clear from the start about your expectations and that you will evict if new tenant doesn't follow your rules.With my setup - I furnish the rooms and have all utilities covered.