He's changing the terms of the agreement, and you can choose to accept it or reject it.I don't think it's fair to pass this cost onto the tenant just because you are unwilling to stand up to the contractor.

Also, you didnt mention any financing costs, was this built with cash or do you roll that into your cost of construction?

Even if they don't realize how much money you're costing them now, someone will tell them eventually and I don't think your canned wholesaling response is going to do much to repair the damage. 

Houses out here cost average $1.3M and rent for $4,000 per month. 

Multiple people including myself have tried to caution him of the the true costs but he's been repeatedly dismissive and has made it clear we give him motivation and he wants to prove us all wrong (whatever that means). 

And then also do you typically repay each partner their upfront costs from the profits before then distributing profits?

@Ben Syzek with $50k, you're probably looking at a property with a total cost (purchase price + reno) around $250k.

House hacking is a great way to build wealth while keeping your living costs low.

•This additional income can help offset costs and increase your total reported income for future pre-approvals.5.

So if I do a good analysis of the property (including all the costs) and the property generates monthly CF with a DSCR above 1.1, I would be removing a big risk because the numbers add up.