Builder is pricing the overall build at 550$/sqft for a design option for a 2bed/1bath, two story.

It's very unwise to use a new builder in the area as you need someone plugged into the town so you reduce your delays and get inspections on the timeline as they expect.

I have been hassled and harassed as a builder by Building Inspectors for nothing.

I know the builders are offering more incentives to buyers, but does new construction typically pan out well as investment properties?  

Several that I know meet regularly are those hosted by Bobby Sharma (usually meets on the peninsula if not virtually), Neal Bawa (mostly virtual these days), Lori Greymont (SJREI in San Jose) and Bay Area Wealth Builders (they meet in the north bay).

I’m a builder/investor here.

Will you be using the same builders/crews as you did for the first one?

I work for a developer/builder.

I would think of this problem differently: I might encourage them to explore ADUs... this would give them an additional stream of income and would likely only require a relatively small chunk of money in their savings (relative to the total cost).If they could partner with someone that has experience building and/or flipping (to qualify for the construction loan), then cash them out with a 30-yr DSCR loan (and use that as the builder's profit), then they could rent the property and enjoy the cash-flow.

Sold developed lots to national builders What was the outcome?