For now, when the budget is a little tighter, expanding relationships seems like the best route that doesn't cost money. 

Problem is, the first bank I've talked to said that I am going to get killed in fees, closing costs and interest, as it would be treated as 3 separate very small mortgages. 

The calculation includes all costs going in and monthly costs if being held. 

You need to make sure there is room on the electrical panel to add larger appliances and also plumbing is easily accessible (to keep costs down). 

We've found funding for the construction costs, but not for the actual lots themselves.

If you have the cash and the credit and the deal scenario works (meaning the project cost is less than 75% of the ARV) then you should get 80% - 85% of the purchase, 100% rehab held in escrow, at about 2 points with like a 1500 service fee.

The goal in the future is to get the permit and add the value for a future refinance.I have called the county and building department and they said that I will need blueprints of the alterations and submit them for approval and get all the inspections in place (I know this will be a headache and can be very costly).

I wasn't unprepared—I had a clear idea of my MAO,  ARV, and estimated repair costs.

Alternatively there are also asset based lenders that do not require DSCR calculation or income verification, that can be less costly than hard money, and fully amortizing.

Be aware of additional costs such as service charges, registration fees, and maintenance fees.- Property Specifications and Quality: Detailed Specifications: Get a detailed specification of the property, including materials, finishes, and fittings.