I'm not a professional, but I'm pretty sure it's much more cost efficient to build what you want than to add on, however much the additions have been planned. Your plans look tiny. I suggest you hold off and save up until you can build the house of your dreams.

You very well may not get a mortgage building that way and a builder or several builders would definitely charge you a premium for that.

If you want to pay triple what you would just to build what you need from the beginning....,

Costs always go up over time, so building the entire structure now will be far more cost efficient than building in stages.

There are lots of historical precedents for doing exactly this. The cape cod structure is particularly charming. You first build the small main home with a kitchen/living room and bedrooms above, and then add on a wing on each side. I think it is a fine idea to look into but I wouldn't change the purpose of the rooms for cost reasons. I would start with the kitchen, living room, laundry and bathroom on the main floor, and two bedrooms and one bathroom above. Then you could add on a wing on one side that had a family room (or dining room) and another bedroom above it. You will have to like renovations to not mind doing it this way though!

You'd be living through renovation after renovation after renovation after renovation with the next one always around the corner. Exhausting! I am just finishing up a three-month one now and I hope not to do it again for many, many years.

I came across these sets of vintage cluster houses where you can start with one unit and add more as you needs and budget suggest. https://antiquealterego.com/2013/07/15/vintage-house-plans-1960s-cluster-units/ 

Don't know if they're a good idea or not, I just thought they were interesting...

Why do you want to build in phases?

My uncle did that 60 years ago. It never really got finished. I think that is pretty common.

Early last century, building a small house to live in and then convert to garage space after building the desired house was a common idea in my area. There are many of these "temporary" buildings still unconverted to this day. They are difficult for current owners to expand because they sit at the very back of the lot so many of them are rental properties.
After the city adopted a zoning code regulating them, single story houses with walk up attics for later expansion became the typical house planned for further expansion. My own house was built in 1933 and the attic space wasn't converted to living space until about 75 years later. Converting the attic to a master suite is a common project that gets expensive quickly when doing the plumbing and HVAC to meet current expectations.

In Maine we call the progression “big house, little house, back house, barn....it’s not unusual at all. As others have said, do it, but don’t change room function, especially when plumbing is involved. And I do know people who have built a garage with an ADU above....and then moved onto the house, and then connected the two with a family room...but has been pointed out, lenders aren’t always keen on that.

If you plan to get construction financing, the bank typically allows you 12 months to complete the home with a six month extension, if necessary.

Also, I suspect that a phased build approach reduces economies of scale and push your costs up.

Besides, money is so cheap right now, I'd do as much as I could as soon as possible. The price will like not be any less expensive than it is today.

Traveling through the back roads of Indiana once, I noticed lots of "basement" houses. I was informed that it was quite common to build the basement and live in it for a while, then build the house above it later. I would suspect visiting now most of those houses are still basements.

The phasing should be well planned by a professional for adding a bedroom, adding a bathroom, finishing the basement, converting the attic, adding dormers, adding a garage, etc with a minimum of demolition and reconstruction.

Anticipate as much of the structural work as possible.

Your wisest investment at this point would be to hire an architect with residential renovation experience.

Don’t do it. Building is hell so don’t put yourself in a never ending stint there. You will pay far more. Interest is low now so take advantage and build the whole thing.

First off, thank you everyone for the advice. It’s very much appreciated!

The land I’m building on isn’t mine. My parents are allowing me to build on the 3 acres that they own. So any type of loan I’d pull right now wouldn’t be in my name.
I’m building this with what I have in savings.

Also it’s considered a guest house. If I pass my parents house in sq ft, I’ll have to add a two door garage.

Thoughts on building a small cottage, living there for a bit and then building the house later down the road?
The cottage could be converted into a three car garage?

I would never build on land I didn't own.

To be honest, this sounds like a terrible plan. You are going to build a house that you won't own. I know that this is your parents, but you never know what COULD happen down the road.

Yeah my parents aren’t like most lol. They’ve always been givers. They’ve ran they’re bank account dry to get me through school and have everything I’ve ever needed. They’ve invested thousands on helping me and my brother start a business. So that’s out of the question. When they retire, I’ll be here for them as well.

No matter what you decide to do, get the land subdivided properly, and build per zoning code. You will save someone a lot of problems in the future and you increase the chance that what you build retains value.

Can your parents gift you the land, then you should get your own financing to build.

So, let's say your parents need to go into assisted living, or there is a tragedy or medical emergency of some kind (which happen unfortunately, regardless of age or health) and there is a lien taken out against their assets, which includes "your" house? What then? What happens if they pass unexpectedly and "your" house is left to an estate, which may not be in your name at all because, unbeknownst to you, your parents left everything to their church or some long lost cousin that no one knew about? Or is spilt evenly amongst a group or you and your brother? Now they/your brother own part of your house. Which you paid to build. And now you have to get them to sell to you and pay them for the privilege. We could all go on about all the what-ifs here - get the land in your name/trust before you even consider anything else...

As the previous comments point out, there are many pitfalls to your plan. Putting all of that aside, and just looking at the logistics of what you are trying to achieve, I would suggest building the foundation, framing and exterior for the entire house you envision. Once everything is weathertight, fit out the interior for the smallest portion you can live with. When more funds become available, you can continue to finish the portions of the house that you need. You'll still pay more over time this way, but you won't have to "live through renovation after renovation" since you can close off the portion of the house you are already living in.

Wiscokid explained it perfectly. You may think that this would never happen, but it does, all the time.

Once you've figured out the ownership situation, I do think RappArch's recommendation is a good one.

Thank you for all the advice. I’ll look into ownership.

following

A kit perhaps?

https://www.bobvila.com/slideshow/14-kit-homes-you-can-buy-and-build-yourself-44417