Are there folks out there, private money, that will provide second positions loans?

I have seen many get completely ripped off and worse, contractor takes the money and poof their gone.

Every VA in the world is using that nonsense.It doesn't even make sense to a seller since you said you can have their property sold AND you decide on a price and send the money to them.

Redoing the titles and warranty deeds for our properties is costing us money I could have avoided if I had known better. 

Do this in tandem with being disciplined in your spending habits so you can save up more money.

As a side note,  it doesn't seem like the margins are very good if you are spending $450,000 on the hard construction, still have carrying costs (debt service/loan origination, taxes, builders risk insurance and general liability) and have to include the subdivided parcel which presumably decreases the value of your current home.

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.

My friend is going to supply the money for the down payment.

They’ll come for their money regardless of where it ends up. 

The market looks great now because so many investors are pumping money into that market.