This particular strategy was personally told to me by Jimmy while we were driving from Phoenix to Las Vegas in the early 1980s to attend a real estate exchangers conference and exchange session.   

The custom builders in the area are very competitive and are offering pretty inexpensive builds vs comps.If the lot was purchased recently for 20K and the turn-key cost to build is $200K, after I close on the house (bank said appraised value would be 220K), would a new buyer have problems with it getting appraised over $220K even with other comps selling for 300K+?

For background this is my first investment and I own the property personally not with an LLC or anything of that nature. 

The unfortunate thing here is that investment properties foreclose at a higher rate than primary homes so many banks just don't want the exposure to this.

I personally would put down 20 percent and keep the rest of my cash, even if it meant I wasn't "making money" in the beginning.

When you get them on the phone setup a time to do a zoom call, see how they do business, who the connections are they have, and if you get to know them through those conversations and feel good go meet them in person.

However, the person you spoke with has a good point.

Is it better to use a Bank or Credit Union?

Attention: Beware of Non-Bank Fintech AppsI hope this message finds you well.

If anyone is interested I have a contact person who can provide more information.