My thought on that is if I can find PM for properties like this, then the only major concerns I would have is vacancy and repair/maint cost?

I will obviously do my due diligence concerning the zoning, etc. before committing to anything. 

One would think she had an idea of what the condition was prior to giving you an offer but regardless had they set aside the time for due diligence she could've voiced her concerns then.

SELLER CONCESSIONSSeller concessions include, but are not limited to, the following:Payment of the buyer’s VA funding feePrepayment of the buyer’s property taxes and insuranceGifts such as a television set or microwave ovenPayment of extra points to provide permanent interest rate buydownsProvision of escrowed funds to provide temporary interest rate buydowns,Payoff of credit balances or judgments on behalf of the buyerSeller concessions do not include payment of the buyer’s closing costs or payment of points as appropriate to the market.Any seller concession or combination of concessions which exceeds 4% of the established reasonable value of the property is considered excessive, and unacceptable for VA guaranteed loans. 

My concern is that each unit is only 1 bed/1 bath and the property has no laundry.  

I suppose my debt to income ratio will have to be good enough for both the rental and the house being built (even though I'd be renting it out as soon as my construction loan went to permanent)?

I'm sure they need some type of permit and permits typically require notifying neighbors so they have a chance to voice opposition to any zoning use change be it permanent or temporary.There must be some more appropriate place in your city that would better serve the needs of the homeless than a vacant lot full of tents.

It is suitable to live in permanently it's just that the advertisement calls it a cabin and I don't know what differentiates the two.

The major concern I have seen is Loan to value and debt to income.

We understand your concern of "voodoo" numbers, so we are obviously sensitive about it.Stick to good markets, and good neighborhoods, with great property management and you will be very pleased.Continued success!