In France, they sell wine.They identified their customers (in your case, reliable tenants) and provided what they wanted to buy (rent).SummaryFollow this proven, step-by-step process to maximize your chances of success and minimize risk in real estate investing.Has this process proven successful?

Best of luck as you take the next steps, and feel free to share updates or ask more questions!

The first step I'm doing is checking with the city zoning to see what they would allow before I get too deep with looking at plans, financing and construction. 

This has been one of our goals since starting the Academy: to help our clients take that next step into purchasing investment real estate in an effort to create financial independence & generational wealth through cash flow, appreciation, and equity.

Do you have a step by step list when looking at the potential house?

Quote from @Shayan Sameer: Quote from @Zachary Deal: As several folks have mentioned leveraging equity in current property you owned is a great tool but still comes with the some of risks as you had before using hard money debt as there is never a guarantee your new project will be a success (there will always be risks with real estate investing).Leveraging your investment property would probably be the first step I would take. 

Hey @Chris GarnesI just came across your post, and it immediately reminded me of a project I handled with a colleague in San Diego, Dennis Bragg - https://www.biggerpockets.com/business/page/3607  - You’re sitting on some serious potential with these two properties, and your plan to step back from construction while finishing them makes total sense.For Home 1, with no mortgage and a prime design upgrade underway, you’ve got flexibility that most investors would envy.

All that is required is 4 weeks advertising in the local paper then call the sale on the courthouse steps the following month's first Tuesday.

. - 2 story house with very small rooms and and 2 steps down, imminently as you enter the front door.- Gated community and in a reasonable HOA. - The home is 2 payments behind and already got a letter from the lender about future foreclose.

Your first step is definitely learning about the markets you are interested in and figuring our what your desired end state / goal is that you are hoping to achieve through real estate.