., soil tests, and DOT have green-lighted a minor subdivision, with a major to follow, for a total of six parcels.

I have seen when LTV's are at real low levels with a big down payment the underwriters tend to relax a little more.

as low as 5% down on 2-4 unit, lower mortgage insurance premium and no upfront insurance payment at closing, and it's a conventional loan so stronger offer and less red tape than the FHA. 

It is much easier to get a loan for a property you are going to live in, especially with low money down.

If you refi out of FHA, it allows you to use the low down payment option again for another purchase.If there is a college student market there, you can generally make more than normal leases by renting rooms individually.

I would say your cost estimate is way off, I haven't heard of anyone doing a project like that for $100k (granted I don't know the details) because construction on small projects is running $325 (at the EXTREME low end) and up - some other commenters have mentioned this as well. 

Low risk and potential to make a sizeable return without using credit or very much cash makes this a very attractive way to invest in real estate .

I believe that’s the best way to get in the RE game because of the low down payment.

I'm obviously trying to stay low cost here as it's a flip and use a more lean contractor.

Best of all, given the low loan-to-appraised-value, you might be able to avoid giving a personal guarantee to a private lender.The real question here is how much this deal actually makes you, in relation to the amount of time and effort involved.