My portifolio lender is going to finance it as a new construction.

If I were in your situation, I would consider properties like these and get a construction loan: https://www.redfin.com/OR/Portland/5330-NE-23rd-Av...It's a darn good deal in a very nice neighborhood from what I can tell, but it looks like it's a highest and best. 

I used to work construction and understand things happen, but they had poor communication and customer service, and I found I had to always be on the phone with them to ensure the project was getting done.

The whole Title III construct is broker-centric and doesn't really fit well with the RIA or issuer regimes.  

But that's not saying it is 100% accurate in recent flooding of Katy and Cypress areas in Houston there were houses flooded that they were not in the flood zone, one of the reasons apparently is the amount of new construction that was done over the past few years changed the flood plain.

I've been surrounded by the construction industry my entire life and, by extension, the commercial real estate industry.

A construction loan perhaps, but at what terms?

It all works and a year or two after the 8,000 multi family units downtown/west end that are currently under construction come on line there will be tremendous demand for the single family houses .5-1 mile away. 

We both utilized our saved funds and favorable construction loans from a local community lender and closed on these properties in 2015.

I guess I see construction sides everywhere :).