I typically recommend that community for people that plan to use it personally and can justify the higher HOA costs and membership fees.

The if is the challenge as ground up ADUs typically cost more. 

@Michael Izbotsky In community property states like California, assets acquired during marriage are typically owned equally by both spouses, which may complicate transferring jointly owned property into your sole-member LLC.

Typically $2m+ homes don't cashflow due to high taxes, high insurance rates, and low rental demand. 

Could I be missing something, or is this typical for the market right now?

But you have to understand the seller is taking on a significant risk of having someone else run the property and not knowing if they will get the final payout.If you are getting typical rates, why would you not just buy the property outright with 20% down and obtain mortgage financing from a lender?

You typically don't want to split up construction and engineering services/planning here, but we did this to let us see how well we work with the firm.It's probable, if we work well together, they will also be our GC.

@Loan NguyenRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

It is typical for them to be bad.

I typically wouldn't look at new builds but it seems to be very reasonably priced.