I do HML, generally lend about 65%, and require borrower to use their own rehab funds (on top of their 35% down payment).

@Jesse Hinaman is of course spot on about down payment requirements.

Hi , I am buying a one family home, and would like to rebuild it from scratch, home is around 700k , rebuilding might cost 400k , I have enough 20% down payment and my dti ratios allows me at 800k conventional,Whats the best should I should do for this home?

Make those payments monthly.

I just don't know if I want to whether the payments on the property during the construction period without any income coming back from it 

With no money for a down payment, how do I do that though?

In order to get the down payment funds, I will take a loan out of 10k, which will give me a 176 monthly payment for 60 months (5 yrs).

This would lower the required down payment into the range of 3 - 10%.

Or maybe use OPM for the down payment only?

The memorandum (some use a letter of intent) approach is considered a "soft lease option" because the memorandum is generally a non-exclusive agreement that gives the seller the ability to walk away at any time if they choose to do so (even once you've spent all your time and energy finding a buyer and the seller decides to walk away at the last minute), but also gives you the ability to gain an assignable interest via the memorandum in a way that feels less scary to a seller (and generally you can structure the terms of the memorandum to have the rental payments begin the moment you assign, so you don't have to make payments while you're trying to find someone to assign to).You can also gain an assignable interest through a "hard lease option" that is exclusive between you and the seller, and will usually require you to start making payments at a specified date.