Title company tax certificates will cover all the bases.

The rent doesn’t cover all the fixed monthly mortgage costs, PITI, but

But if they do you are covered.  

Your plan may cover all of the strategies you touched on, but over a longer period of time with definite transition points. 

Which by the way they don't cover.

The details:Location: Denver, Colorado located in very hot real estate market in an excellent location within 2 miles to downtown.Land cost: $475,000 currently with small 900sqft home on property Mortgage/holding cost: mortgage is $2800; I will be renting home on property for $1750/month (so I will be paying $1000/month out of pocket holding cost) while we go through the permitting processPermitting process: estimated to run 6-8 months in Denver before build can beginLooking to build five, 3-story townhomes on the lot, 1550 sqft each (about 500 sqft per floor), with detached covered garage in rear of lot for four of the units.

As long as the tenants are paying all the bills I would say you have everything covered.

Call me a negative Nancy, but if something goes wrong-say a break in and you were the last one to leave the apartment-who's insurance covers it-the tenants or yours? 

In addition to the bedroom/bathroom work, we also added a covered front porch without a permit that we planned to disclose on the sellers disclosure at the time of sale rather than getting permitted.

In Dallas, my office has covered reserved spots (mostly empty), other offices can't charge enough for low garage reserved spots.