Depending on the lender (bank or alt. lender) you have to look at origination fees....points, doc prep, interest rate, frequency draws are allowed/min. draw amount allowed per request, interest payments vs. interest reserve & whether interest reserve is capitalized to fully understand the true cash requirements.

Quote from @Devin James: Quote from @Dominic Mazzarella: Quote from @Devin James: Everything went wrong with this investment:   - Took 4 months longer than expected   - Cost $10K more to build than we anticipated   - Sold for $20K less than we anticipatedWe still profited with a 30% return on equityThis is why I love Real Estate InvestingWhen you do your diligence and stay conservative with your numbers, it takes something really bad to lose money.Here was the original post:My siblings and I are building a home in North Port, FL.Here are the numbers: - Finished Home Value: $412Kish - Land Cost: $19,750.39 - Construction & Permitting Costs: $304,897Additional costs: - Environmental Site Assessment - General Liability Insurance - Builders Risk Insurance - Construction FinancingWe will be listing the home this weekPhotos coming soon!! 

He ended up having to sell the home instead of renting it out, which wasn’t part of his original plan.

I would first separate out the original purchase price between building and land.

If I add up all the lender fees and my holding costs—like points, origination fees, and interest —I can figure out how much profit I’ll make and what my maximum offer should be.

So you might as well be a head of the game do the cash out refinance buy the next 1-2 properties and simply refinance the original mortgage as a "rate and term" which carries a lower rate.

they make money servicing not originating new loans. 

According to @Andy Sabisch's original post, I think he is asking for advice on how to confirm the veracity of the neighboring tenant's claim.  

Understand Replacement cost versus original building costs. 

But you don’t know much about the original poster—just like everyone else here.