However, I am worried that the banks would not see it that way and would instead focus on the fact that a large portion of my income would go to debt payments each month.

As I am not licensed to practice in your state, I would do you the service of not explaining in great detail, after my reading of the Ohio Constitution, of why I think this violates the Ohio Constitution.I would say that I do believe it violates central precepts of Federal Law, namely the Commerce cause and/or its negative implications, and through the incorporation of the fourteenth amendment, the violation of what I would consider to be a fundamental right (although not entirely elucidated in case law yet), namely that of the ability for people to freely contract for the carrying out of what I would consider basic and fundamental conveyances of property.We could debate at length about this portion of the situation, but as you said, you are not here to do that.

I am curious, will I generally need to get closer to 60%-65% LTV for the construction portion of the project?

I have also listened to every podcast multiple times.To give everyone a little background on myself: I recently withdrew from an accelerated combined undergraduate/graduate degree program after the first year of the MBA portion for reasons I will discuss below, and subsequently was awarded a Bachelors Degree in Business.  

I have been trying to figure out how to purchase a rental property to help pay a portion of a family members college costs.  

It created some problems for us as we tried to level the pier and beam portion of the house.

Your net worth in the example above is simply 100k (A) - 50k (L) = 50k (SE).However, you very astutely noticed that this 50k would not be a very accurate figure if you were to try and liquidate your home position to cash.You can account for this by bucketing your assets and liabilities into Current Assets/Liabilities (Cash, Stock, Credit Card Debt, Current Portion of Mortgage/Car/Other Loan) and Long Term Assets/Liabilities.  

Is it best to deposit this portion in a separate bank account? 

Hmm could a portion of that be included in the rent?

You pretty much have to bite the bullet, unless there is some reasoning behind allocating a larger sale price to the land portion.