Make sure you include all your cost, both soft cost and hard cost along with some sort of development fee.

Those would be wood, will have good drawers, most likely will have soft close doors and drawers and wont have particle board. 

There is no such thing as one bank or mortgage company that's the right total value proposition for all use-cases, it's necessary to factor in both "hard" costs like rate and points, and "soft" costs such as how fast do they go and how easy are they to work with, to find the right home for that particular loan.Since this is a refi and not time-sensitive: If you are super busy and your time is worth $100/hr, I'd say #1 is a no-brainer.

Leverage varies by market - typically 75%-80%, rates are generally in line with banks, and the property scrutiny and underwriting time is lighter than FHA.Downside is the prepayment penalties are generally pretty onerous with defeasance/yield maintenance and there are hard net worth and liquidity requirements tied to the prospective debt service and loan amount.FHA can be used under the 223f program, which has a 35 year fixed rate fully amortizing term with rates generally lower than banks or Fannie/Freddie, but the underwriting timeline is longer and the soft costs are higher during underwriting, which means it's only economical above ~$2mm.Also of note, FHA will require much higher scrutiny of the property (because the loan term is so long), so projects in disrepair or with deferred maintenance may be in for a surprise when the PCNA comes back.Both are better than bank loans unless you can get a local lender to do a longer fixed term - some aggressive lenders will do so.

I hope your agent has a soft touch when it comes to negotiations :)Since all your closing costs are already being covered by the seller, you have limited options with how to structure any negotiations. 

With prefabs/modules you may be able to short cost some soft costs such permitting. 

The rest of this street has some decent homes and some not so great ones.We think we might (might, might) be able to get this for $475K, though the owner said he already turned down a "soft offer" at that price.  

The proposed Oregon bill is a pretty soft "rent control" bill that stills allows the power of a fixed term lease (where as Portland killed fixed term tenancy with it's relo policy).

I assume there is some soft spots and/or unevenness...

As noted by Michael and Greg above, risk tolerance is important, so equity or debt, pay back structure, timeline of investment.I would approach it more as a fact finding mission (soft ask at first).