Not sure when rates are going to drop, so refinace may be farther in the future.It comes down to what your goals are.

What timeline did you use for an exit on the IRR and what appreciation rate?

The demand is high due to location and elevated rental rates in the area. 

I think what we’ll do is build one first ( 9-12 months ) , found a hard money lender with over 273 reviews on here really great , get them to fund the construction , buy the lot for cash in one of the surrounding counties , hire the GC and depending on the market or appreciation either 1.)

Also does it impact mortgage rate and insurance also?

It might work for LTRs but not for STRs.Your best bet is to keep a good maintenance fund ready to go to cover repairs.The most important thing is regular maintenance.

Right near the cool old downtown area and good schools and A rated area.

Any advise what lender i should request funding.

The seller did not realize there is a cost to lock in rates.

It is very challenging to debt service at higher LTVs given the rates we have.