We believe that house-hacking is our best bet.

Has your work schedule normalized a bit or do they have you working all odd hours still?

Ultimately, portfolio lenders are betting on you as much as your property.  

But the odds of holding that property or having that mortgage longer than ten years is heavily not in your favor.

It seems odd you'd have to actually fill the system that often. somewhere or some how you must have a leak in the system to lose that much water.

I've also invested in Lancaster & Palmdale, and in your likely price range that may be your best bet ... you can get a single family home in a decent neighborhood or maybe even a duplex there for under $200k.

APR was hard to calculate so we would simply add 1.25 to the interest rate, that may be the case here, on the other hand maybe the computer calculated it and it's accurate, but again, the interest rate and loan fees are what count.Things like homeowners ins, mortgage ins, property taxes, closing fee, title ins, odd days interest, etc are pretty standard. 

Very odd your lender is suggesting this. 

Michael, Your best bet is to partner with a builder and take a cut of the building portion.  

YMMV.I bet there are some other folks on here that are more active than me can give you some good ballparks on what contractors are bidding labor at.