If they have no cash your taking a huge risk on a ground up new build. and for that you would want to get a standby rate of interest like I do say 10% and I would charge 50% of the upside profit.. if they are putting cash into it..  3 to 4 points and 10 to 15% interest is market.and you give them money in draws as work is completed..

My concern is that I am putting myself in danger of being uninsurable moving forward if I go that route.

The skills you learn doing this will pay you actual money but also come in super handy anytime you negotiate with anyone, have to put effort into getting a tough deal to close, real estate terminology, contracts, and so on.Good luck with your journey. 

A little un orthodox but,  make sure to frame and put sheeting on the outside of your garage. 

Sweat equity added would likely put these back around 70-80 LTV after Renovations.   

The idea that you can build wealth without putting any money into it is a recipe for disaster and the sales pitch of gurus trying to steal your money.

•I plan to put 20% down on this new property, which means I’ll be left with about $80,000 in cash after the purchase.Given this scenario, I’m trying to decide whether to pay cash for the second property or continue with the 20% down strategy .

I’ve heard of people getting rehab loans where you put down %20 of the acquisition price and %20 for the rehab and you get much better terms than an HML.

I'm simply offering an alternative viewpoint based on the current market conditions and the heightened competition.It's easy to tell people to put sticky notes on someone's door, but what is the true cost and benefit? 

This puts the seller in a much worse situation than they started, and this burns a lot of people.