I just wanted to check in on the forums if any investors have done this, and if there are any unforeseen big problems I may be missing here.  

Why would you spend 135k to build with a lot worth 5k, puts you at a total cost of 140k plus any unforeseen costs that come along the way.

They get hurt by unforeseen costs and change orders.

A positive cash flow high enough after expenses to be able to absorb any unforeseen issues is desired, but any cash flow is good cash flow. 

  $50 free cashflow can be wiped out very quickly with one reasonably small, unforeseen fix. 

Initially, my renovation budget was $45k, purchase price was $30k ($75,000).The project seemed to be a nightmare and required $10,000 in unforeseen items!

A small Multi Family deal on the NJ coast I was working on fell through mainly because of the insurance cost!

What happened?

The sellers cost on insurance worked just fine to make this a great investment,

It ...

(I would fix&flip but the market is not good for sales where I am)Town approvals are never taken for granted so I am afraid somewhat that some strange unforeseen issue will cause the town to deny my subdivide or it will take so long it will exhaust my capital. 

While underlying fundamentals are very strong in the West, if the economy experiences an unforeseen stumble, there is perhaps greater risk of a price correction there.”

If I put aside $440 for maintenance and $440 for unforeseen costs I will have a net cashflow of $720 which I think is not bad.