Sand might be the right consistency to remove what you need without damaging the property but I would do some additional research online to make sure you don't need to use walnut shells or the likes to prevent damage.

I had a structural engineer check out the foundation etc. out and it is structurally sound.  

Looking for advice on ways to structure this type of arrangement with my parents (examples being I could put the property under an LLC and have them be my “tenants” or I could take a home equity loan without having to sell the home) or any other type of scenarios that could be mutually beneficial. 

Since the funds in the account is not enough to cover the construction cost, we are looking at best option to structure the deal. 

There are a myriad of ways to structure acquisitions, only limited by your creativity. 

30 -45 days ( time it takes for a underwriter to structure and process your new application) after closing provided you have enough equity at the time of closing. 

Do you have a Realtor that works with a competent lender that can help you structure the deal?

Can officially structure the funds used to purchase the property as a loan by creating a new LLC to make the loan to the property LLC?  

When it comes to driving for dollars, how do you recommend I structure my drive?

I don't mean in SE MI where I am at, I just mean they change fee structure market to market all the time.