My brother was 82nd Airborne and I've worked with a lot of Vets and one universal issue I have found is the military environment is not conducive to building and maintaining credit depth or history.

I pretty much live and breathe in turnkey world and see all the ins and outs of them, but I'll start and give you just a generalized idea of the pros and cons of them as compared to buying and rehabbing- https://www.biggerpockets.com/renewsblog/buy-rehab...That article isn't inclusive of all of the pros and cons, I can list more, but start there.

If there is a new 600 unit building is going in, I don't think I would consider touching it, especially if the numbers do not look really good in a stressed environment. 

And it's only about a quarter of your total build cost.For a quick reference and depending on your finishes you can assume that your build cost will be somewhere between $120 and $200 per SF, not inclusing land, architctual plans, developemnet costs, impact fees, overhead and holding cost. 

The idea is similar to modern day pioneers looking for an area to build a new home in a better environment than we are currently in.My question: Does anyone have any suggestions as to how we could incorporate this lifestyle with building a real estate portfolio? 

You need to provide the exact language of the 2 special exceptions they propose for inclusion in the policy. 

Is this number ALL inclusive, or are there additional taxes (school or town taxes?) 

Personally given your budget and familial situation I would lean to tier 1... thats my gut.There are conflicting schools of thought which are generally going to be tied to your willingness to risk and the general environment.

We generally like to keep our tenants happy and care about the environment so we didn't think twice about saying yes, even though all utilities are included in the rent.

The most important thing is to build in a margin of safety, which is very hard in today's environment.