Why not put that money down, use one of your previous properties as collateral, and get a acquisition/rehab loan. 

Can I then use that for the downpayment/collateral for the construction of the structure? 

To conserve your cash, always ask for some subordinated financing (owner financing that is in second place), also negotiate substitution of collateral and discount for early pay off clause in the mortgage document.

Present day:  Here's what we do... we simply add each property as collateral against our overall line of credit.  

When a borrower has more than one property pledged and other collateral is sold, it reduces the debt and remaining collateral may be adjusted as well.

I will grant the bank collateral in all the houses that we are purchasing.

I suggest you run away not walk.Secod time you have asked about analysis on this deal, if you have to ask how to evaluate it, it probably isn't something you should get involved with.Now, that said, if this is something like a finance class problem lets state some parameters, exit strategies, time to construct and place in service, industry served, general location as to population, economic base, % of the deal, collateral security involved and market expectations.

I am not certain I would personally be comfortable with using my primary residence as funds/collateral in this manner.  

These are called portfolio loans, and many portfolio lenders will provide financing without significant income, if the borrowers can show decent cash reserves, have good cash flow from the properties and/or can use other real estate to collateralize the loan.As for whether it's better to leverage or pay cash, everyone has their opinion, but other people's opinions shouldn't matter.

Keep her off and I think you would be ok.MarkShe may not have signed, but their assets they own jointly are probably collateral.