you're way underwater.BRRRR IMO is tougher than advertised. 

U want your parents to talk to their CPA FIRST.. if they go the development route they are now ( depending on the amount of units) creating inventory.. which will be taxed at ordinary income rates ( very HIGH)if they just sell they can 1031  and move on to something else.. many times when you run the math consider the risks of a partnership.. the sale of the land is far better than thinking your going to make some profit.. 

Here's a bit more in detail about how rates are calculated for DSCR loans:1.

Since the interest rates are lower, try the VA Interest Rate Reduction Refinance Loan (VA IRRRL).

You could expect rates in the low to mid 7s for a One Time Close Construction Loan.

There’s no secret formula out there, you will find it near impossible to cash flow with these rates almost anywhere in the greater dmv, you can put more down, you can eat negative cash flow, you can invest in another market (I like the eastern shore, though even there you are probably breaking even at best) or you can put your money in a different asset class, the market decides your return’s for the most part, not you. 

If you need to pull out more than 80% LTV (and some banks allow that) you will be paying into some hefty interest rates.  

For example, if you have a $100,000 loan and your interest rate is 10%, your Dutch repayment schedule will be based on ($100,000 x 10%) / 12 = $833.33 per month.

It does not have a lot to do with birth rate, it is the number of house holds. 

What are their nightly rates?