Our other idea is to start by getting a VA construction loan and building a house on one of the lots and then selling our house and building one cheap enough to keep a bit of the equity we currently have and using that to build the short term rental later. 

we still talk to this day.My uncle (a very good handyman) helped me to fix some minor issues, power-washed the place, paint the interior, and cleaned it up.2 months later I met a very good man whose family situation was hard at the moment.

we still talk to this day.My uncle (a very good handyman) helped me to fix some minor issues, power-washed the place, paint the interior, and cleaned it up.2 months later I met a very good man whose family situation was hard at the moment.

Will convert it from a 2 bed, 1 bath to a 3 bed, 2 bath and (hopefully) re-sell later this year.

Are you just looking for extra cash, do you want to escape your W-2 job, or are you just looking to sock things away so you can live well later in life?

What are the potential issues I may face if going with the lock-up now transfer-later process? 

Also, pulling out cash during the refi now instead of later if you decide to sell it allows you to avoid paying tax on the portion of the money. 

@Beth Zetzman get a hard money loan and refinance later.

My question, with interest rates probably going to rise, and home prices seem to keep going up, should I purchase sooner then later?

We switched to being treated as an S-Corp for tax purposes around 5 years ago (later than we should have) and it was a really good choice, self-employment tax was trouncing us before that.