Quote from @Christene Martin: Hi Christopher, I am familiar with the NJ areas you mention.

Key Deal Points:Loan Amount: $88,000Lien Position: 1st position Purchase Price: $120,000Appraised Value: $250,000Interest Rate/Return: 11% annual returnTerm: 5-year balloon (meaning the entire principal and interest must be paid at the end of the term)LTV ratio: 35.2%---Licensed Lending company for contractsRMLO package completed on buyersServicing company for payment You have not mentioned anything about the borrower.

Not to mention the upfront cost of furnishing. 

Sit tight and wait till rates drop.

A full schedule should be mentioned once the final plan and scope of work are discussed.

Like others have mentioned, there’s appreciation, depreciation, leverage, and tax benefits that produce a compelling risk adjusted return. 

At a minimum,  you should understand what the current zoning is and what restrictions there are.As the post above mentioned reaching out or going in person to speak with the planning and zoning department will be very helpful. 

When one looker was questioned, she mentioned she was the owner of the house across the street and wondered why there's a big, long line.

I can wait it out from  having properties paid off .

A primary residence will most often provide more favorable loan terms so if you are willing to wait one year while you living in your new property and are comfortable with renting out your primary residence to a tenant, then getting something such as an FHA loan is a good strategy to minimize your upfront costs and hopefully get better loan terms.