I could go on for hours of the horror stories, (squirrels raised by tenant's) yeah!!!! 

My goal is fix and flip but I need to raise capital for the initial investment. 

It may be hard to find unbiased advice on account of that.To me, it seems that his/their core competency is promotion and fund raising.

LOL.Here raises great point--here are some considerations1) Figuring out how to advertise on Zillow - mentor can help; take 20 to 30 well lit pics with no more than 1 thing on any surface!

Specifically, under a properly structured Trust the following limitations will apply during the period that the property is held by the Trust: (i) the Trust cannot raise new capital; (ii) other than in the case of a tenant bankruptcy or insolvency, the Trust cannot renegotiate or modify an existing loan nor can the Trust refinance or enter into a new loan during the period that the property is held by the Trust; (iii) the Trust cannot renegotiate or modify its existing leases or enter into new leases other than in the case of a tenant bankruptcy or insolvency (in the case of a Trust that adopted a master lease structure, this limitation applies to the master lease and not the underlying third-party leases); (iv) the Trust cannot reinvest the proceeds from the sale of the property; (v) the Trust cannot modify or improve the property other than undertaking normal maintenance or minor non-structural repairs; (vi) the Trust cannot hold its reserves other than in cash or short-term obligations; and (viii) the Trust must distribute all of its cash, other than cash held for normal reserves, on a current basis.

Is it common for developers to use subsidies to cover 100% of the construction costs without needing to obtaining debt or raising equity?

It WILL always be like smashing through a wall with your head as fists as the hammer, you will "get bloody", it will hurt, it will exhaust you, it will test you to your breaking point and beyond.

If you are going to test the market with a new standard, be patient.  

Am I buying it after it's been renovated and rents have been raised?

Sharing that room will raise bring in 50% more.  50% is good.