Market 1bd rents are about $1500-$2000.Ideally, we would have 24 months to get thru plans/engineering/permits/renovation.

Just because you and they would have history together and on the same property. 

Have you run the numbers on MTR/STR to see if your cash flow improves?

I'm looking for an experienced contractor to partner with on my first full flip; I own two properties and have done minor renovations to those properties but this is my first full flip with a full rehab so I want someone with experience to assist as I learn the ropes.

If I were to invest into one that was grandfathered in, would I have to convert it to a MTR?

For example, if they want a large down payment, and you only have enough for a 5% down payment, that is an issue.

Any area can have issues, but pretty common in those areas. 

I've heard this stat or stats like it before and while I would suspect a very high percentage of millionaires got that way through real estate and maybe 90% have used real estate in part to become a millionaire, I sincerely doubt that 90% of millionaires got to be millionaires exclusively or even predominantly through real estate. 

It's vitally important to know who you are working with, and have the history of the players involved.

I have often seen many people love the idea of building, but once they figure out the cost, those ideas change.For reference, here in Chicago, you can expect new builds to be between $200-$275/SF depending on MANY factors...that's just a very rough ballpark!