.$80k cannot get you at $400k house, you need closing costs + reserves.

It has sat empty for the last 20 years but the current owners have completely gutted it, have bids from contractors they're willing to share, cost estimates etc. and have had lots of inspections done and so much pre-work with the city and county to figure out what they can and can't do, so a solid plan is already in place.

Fannie/Freddie both allow up to 90% financing. https://singlefamily.fanniemae.com/media/20786/displayHOWEVER, the  loan level pricing adjustments are HUGE on these loans: So, the rate and costs will be very high. 

If it was me...I'd check with zoning to find out how many dwelling units I could build, and I'd find what the requirements are for those units (type of house, height and setback restrictions, etc.).Then I'd find out what local builders think the cost to construct would be - just get a cost estimate per square foot for 2 or 3 different levels of finish.

I am happy with the cost and what it provides. its not a completely "set and forget".

We're very in the beginning of the thought process of how can we see family more often without it costing an arm and a leg. 

@Adam F. your real estate attorney should be able to tell you exactly how much this costs.

If an investor can create a Texas Series LLC for $350 and place each investment property inside a separate series at a cost of $27 filing fee, why not take this step to ensure that the problem of one property can’t flow through to the other properties?  

Now, you are asking can you use a Gap/Transactional funder for the downpayment and closing costs? 

Are costs really lower with a container?