But in terms of the upfront fee, this is actually common in a commercial loan.

Hopefully, based on actual field measurements, past project data, and estimating software, your contractor can develop a detailed estimate that lays out the cost of labor and all materials for each phase of the project.

If it is accrual, then when you actually make the payment does not matter.  

I actually have a fee in my lease if a tenant wants me to physically pick up a payment.

@Nicholas DillonI concur with @Vessi Kapoulian comments.Promised or projected returns do not mean actual returns.

If you look at the Forbes list of richest people on earth, I think you have to get down to something like 150 before you find someone that is actually listed as having made their fortune in real estate.  

@Jay Hinrichs I handled an auction sale years ago where the city/state had assessed a riverside parcel at 60+ acres for decades when it was actually less than 20.

You can question all you like, but if the unit isn't actually working and you do nothing, that's not cool.

Although you are a new investor, you actually have more and better options than seasoned investors.Id they need a second parking spot , rent that to them also.

Btw, I’ve found that these types transactions actually work better when used to purchase/sell COMMERCIAL property. 2.