But it was to much of an undertaking to feel comfortable with. 

We typically try to pay our LP investors a 20+ % return (our financial model require a 21% IRR over a 5 year hold) in order for our firm to undertake the property.  

All three were a huge undertaking with tons of ups and downs! 

How do I undertake this endeavor in a way that would withstand ethics scrutiny, if any were to come?

Honestly, developing the project myself sounds fun/challenging/rewarding but I know I do not have the wherewithal at this stage of my career to undertake such a project.

In truth, feeding a property is not the greatest situation in the world and if your appreciation projections are off (which is likely 5 years into the future) you might find yourself as a desperate seller in a few years.Feeding a property  (also referred to as "negative gearing") can make sense if:- You have sufficient cash flow from other sources like a job where a large repair bill won't sink you- You are converting a home into a rental in which you put little down for a FHA or VA loan (as examples)- You are undertaking an expedited paydown of the mortgage to enjoying a better cash flow downstream (perhaps aligned with a retirement age)David

I am trying to find the best way to price and design this kind of an upgrade and whether it is a reasonable project to undertake.

@Sam OwensSince you are a first time investor, I would suggest assigning the property "as is" instead of undertaking a rehab.Unless you have funds on your own or you personally know people with money, it will be hard to get money, even from private lenders, unless you are willing and able to put some "skin in the game" (money down.)You build up your experience and resume as an investor by doing a few wholesaling or assignment deals to start with.Also don't second guess what potential buyers would be willing to pay for the property.

Neal Richardson I applaud you for the work you are undertaking with these students and I hope your program is wildly successful.

It then had to undertake an eviction action against the people living at the property which was completed in November.