Your focus on the Dallas market and Fix and Flip projects sounds solid, especially with the DIY approach and having an interior designer on your team. 

Most who struggle with construction approach ground up construction using a generic cost per sq ft analysis which often backfires. 

This is a numbers game so you may have to take an aggressive approach towards negotiating several deals before one of them actually works out.

Total profit less closing costs and commissions will be about 42,500 each or 85k total.I would for sure get a construction loan, may be worth approaching 2 or 3 different banks and getting separate construction loans from different banks. 

After weighing our options, it seemed the best approach.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Listing your property there ensures visibility.Build Relationships: When agents reach out, respond quickly, highlight your property’s amenities, and showcase your flexibility to meet displaced families’ needs.Highlight Insurance-Friendly Features: Emphasize features like flexible lease terms, utilities included, and a fully furnished setup to attract insurance placements.This approach has helped me successfully market to insurance companies.

Given you and your investor both have experience in different areas, I’d say keep a flexible approach and compare city requirements before putting too much money down.

Would you be willing to share how this approach has worked for you?

Maybe there's an angle for seller financing or some other creative approach to get the seller the total return they want over time, but it's hard to say without actual facts and data.