how do i build/buy on an occupied residential lot??

or, at the loading screen before loading your saved game type in the cheat "Testingcheatsenabled on" or "true"
then load that saved game, once loaded and playing what ever family you are playing, but not the one you want to add to, find the lot and hit Shift and left click on the lot and choose either "buy" or "Build" on that lot, then you can do what ever you need to do.