You would be hard pressed to find properties in the 60 sq ft range which  are in your own backyard There is nothing like mining your own neighborhood and investing for both cash flow and appreciation Study you local market and I be you will find both types of properties that would be much less of a gamble then venturing into the unknown 

(you are still gambling on appreciation, but the odds are good the rents are rock solid)If it is in National city, chula vista, vista, oceanside, etc..

I was thrilled!

The guy with a gambling problem can discharge.

If you've got the house a crazy good price, this may make sense for a flip, but it is definitely a gamble. 

Needless to say, I was thrilled!

They obviously weren't too thrilled but then gave me the information that they need to make $80k on the home.

Maybe your buyers will be thrilled to have a newly constructed building but the banks and other lenders which will be the mortgage holders will not care and not lend anymore money on your new construction as they will for much older homes.

It is still an extremely good bet odds-wise, but I don't gamble, and $1M would make a very big impact in my life.  

If my taxes go up 15-20% I am thrilled because the market value of the buildings has gone up 50-100%.