Our plan is to hold this medium-term rental property to build equity and develop a larger portfolio soon.

The advantage of the law firm is they will do it every time they come up for appeal and you will not have to pay attention to the deadlines. 

Or when you say 100k .. do you mean investor has to basically pay cash for the lot and trust the home will be built etc etc.  

You can select the option to have the applicant pay for the service.

I am looking into option what can i do at this point selling I dont think anyone would pay me this much since the value of the houses are slighly going down in NJ. what would be my options at this point? 

I'd rather just pay the slight premium to get into the bigger market, personally.Anecdotally, the STR Facebook groups I'm in are constantly full of posts with people in the Georgia mountains panicking about empty calendars. 

What loan product can I use to keep my current property , rent it so it can help pay for the loan while I build the second property ?

(So yes, you may win the auction for $12,000 owed to the HOA -but now the first mortgager will come after YOU if their primary mortgage isn't paid... and you can be sure the original owner isn't going to continue to pay that if they are out of the house). 

Thanks you for sharing.Question, as I pay down the principal on the entitlement, does that me the entitlement goes down too?

You do need Form 4797 to calculate and report depreciation recapture and pay tax on this portion.