You'd essentially be spending $200-500 to get the confirmation that you should start the loan process, then spend another $200-500 as part of closing the loan. 

Then build a reserve fund of $10k or so for multi family repairs/capex.

As of the end of last summer I have a very pleased text from the tenant confirming everything was back to normal and in working order.

This should indicate that you have financial reserves or are very highly risk adverse.

Hi Wei Jie,The strategy can work as long as you have positive cash flow and deep reserves to sustain you through different cycles of the market.

You would have to figure out financing with a construction loan, confirming with the planning commission that they would approve of your project, and go through the design phase before talking to the planning commission.... 

Our idea so far is a sort of poison pill clause that "if one tenant moves out, landlord reserves the right to cancel or renegotiate the lease" or something along those lines.

Don't close your longest credit line and review your credit report yearly to confirm there are no errors, if there are errors then dispute them immediately after finding them.

Thanks for confirming what I thought.

The smart ones who know what they are doing will have the proper reserves set but most do not.To me, it's more about time.