Maybe keeping the current mortgage and utilizing the $25,000 HELOC is a reasonable path...just a little slower than the "cash out refi and buy 2 more properties" path... 

Holding the land until utilities and septic become available before building.

We furnished the basement and rented it through Airbnb - the income fully covered our mortgage and utilities!

The house has a walk-out basement with 1 bed 1 bath and a full living area.We furnished the basement and rented it through Airbnb - the income fully covered our mortgage and utilities!

There is no wrong way to go about it, you can use OPM or "other people's money" or utilize a government downpayment resource or look into FHA loans to see if you qualify.For a first step get in contact with a mortgage broker to see where you and your financials stand as far as obtaining leverage on your money. 

I used the deposit to pay for the cleaning and anything left was applied towards unpaid rent or utilities.

My state is paying up to 12 months rent and late fees, 12 months utilities and they will pay rent going forward if you prove hardship.

If you have a good rate then enjoy your low interest debt and utilize your money in a better investment.Forrest Faulconer 

- Rent for a 2 bedroom in Rocklin is around $2400 per month + utilities. - How much do property managers charge?

These can include -Additional savings or reserves that you, or you co-borrower may have-Proof of payments done on time for utilities and/or rent-A letter explaining how the applicant would be able to make mortgage paymentsFor reference on how to calculate your DTI, check previous posts!