The monthly HOA covers: Association Management, Insurance, Maintenance Grounds, Sewer, Security, Taxes, Trash, and water.What next steps would you guys take to get a better idea about this deal?

Essentially I am finding and procuring the land/lot via traditional financing and funding everything through the development phase until we get to Construction Loan. 

Hi Flavia, the loan is 3.99%, which is not happening in today's market.  

This would help you potentially qualify for an FHA loan when you execute the purchase option.Option 2: 5% payment for the option with the option payment spread out over 12 months from the 2nd month until the 13thmonth.

Should I ask if he has a loan on the property that is assumable?

You could do an 80% LTV cash out on a DSCR loan, however you will need to be able to debt service at the higher loan amount and rate to qualify.

I'm assuming that what you describe as a "hard money loan" really is a "hard money loan". 

It must be a "line of credit" where I can make draws, and not a home equity loan. 

Can I use an fha loan for a multi family property new construction?

If there is enough equity within the properties based on their appraised value, you may be able to do a packaged loan for these two properties and then have enough equity for a down payment on another property.