Being in Orlando it's one of the more safe areas for hurricanes but make sure you pay attention to flood zones, get flood insurance as necessary in case of flash floods in rivers, and make sure you can get legitimate insurance providers.

Their goals and upcoming upcoming purchases may come into play. 

Quote from @Sebastian Bennett: It's funny because I actually had a dream of setting these up and seeing how this would play out lol

I could see a value-play here for monthly financial reporting, if not handled directly through PM systems.

What incentive is there for them to perform well on the deal if they have already made 18k off of you and it is only your money at play. 

BRRRR and REITs are both completely legitimate investing strategies. 

Like with anywhere else: location, pricing and the overall house you intend to build will play a factor in your profits.

So, you're not "wrong" in thinking it's complicated.The tax code plays heavily into how certain transactions are categorized and there is some flexibility regarding what we can capitalize versus deduct.

Preference is cash-flow, but open to appreciation/equity plays as well. 

Yes, they are legitimate.