This way, you build income-generating assets first while keeping future options open.

Or not topping off reservoirs in advance of a known annual heightened fire risk season. 

The ARV on small multifamily can be a bit tricky as most appraisers will like to use the comparable approach as to an income/NOI approach typically used by larger (5+) multifamily properties.

Why not just save for the downpayment and work on increasing income to qualify for a traditional loan?

Typically 75% of rental income can be applied towards your DTI for qualification. 

However, when you combine the income from both the units, I think you will end up with more income after a year or two than with a SFH renting by the room.  

We need to close on the second piece of land for the parking which is maybe $60k by June so I figured to set it up and raise the first 500k-1 million for the development. the SPV could also just be a development SPV with a refinance as an exit. but I think planning on long term ownership is best with passive income. the structure you talk about with hotels is post entitlement it's hard to negotiate up front. so this is a unique opportunity where we own the land and it's meant to be a good start. 

It lets you focus on managing the property and getting steady income right away.

But with that one lender I found I am not lendable due to not having proof of income for the last two years.

The rental property/cash flow calculator is free but the CapEx one isn't.The free rental property calculator also helps you identify the ideal purchase price range for any potential rental property using what the median income is for any zip code - that is pulled using city-data's website.Hope this helps!