I also don't recall seeing such a high alteration fee, or one based on the percentage of the renovation budget (It doesn't cost more for the condo's architect/engineer to review more expensive fixtures/finishes).

A structural engineer would be your best bet to have a look. 

My firm does engineered cost segregation which requires Form 3115 if the subject property was purchased prior to the current year, called a "look-back study".

I am studying to become a Software Engineer (and hopefully someday design software for REIs).

However in most circumstances I've seen, the tenant takes the space and completes the fit-out on their own with their own Architect/Engineer & Contractor. 

I always like to start with the rents and reverse engineer it.Current rent $625-25% total (vacancy repairs cap ex management)Assuming tenants pay all utilities $470 left before monthly payment, taxes, insurance -$500(estimated) Monthly mortgage payment & insurance (no tax) for a 15 year loan.OR-$350(estimated) Monthly mortgage payment & insurance (no tax) for a 30 year loan.Depending on what kind of loan you have out15 year loan, cash flow = -$3030 year loan, cash flow = $120This does not take into consideration the rent increases.

You want to talk to your CPA first and foremost you don't want to get in a situation were your deemed a dealer and lose your cap gain tax advantages.that said a take down schedule like this is common in the industry.. although CA usually a million dollar property is not a lot.. vis a vi development ground.. and builder developers there usually stroke a check if needed.I suspect though if your going to sell it in phases.the land would be split into 3 phases and you deed out each phase as he pays if off.. but not individual lots that were your CPA can advise you on dealer status.its common though in these scnerios to have accerlated paymentso you have  3 phases  333k each... you sell first phase for  400k.. second phase for 400k last phase for 200k.. this way you get a premium if he fails to buy the rest of the dirtalso in your contract make SURE you demand that all work product engineering soils geo tech that type of stuff is once paid for your property as well.usually in vanilla real estate transaction on the west coast I don't recommend or see the need for a lawyer but in this case I would find a good real estate lawyer tell him these basic terms and things you need then let him prepare the contract.. hope that helps.. and assuming the dirt is in CA.. of course.

For example, you can be fully hands off and less involved (meaning less ROI) and have an engineer/architect, interior designer, construction/project manager and general contractor do everything for you.

Memphis is a great market to invest in so much that I quit my cozy job as a biomedical engineer to move 1/2 way across the county to divulge into the real estate market in Memphis (I am originally from Utah).

@Samuel Sam - if you went to college and your degree is the same as your job (ex you have an engineering degree and you work as an engineer) you can get an exception, otherwise you need to wait for the 2 year work history or pay way more for a loan