It is a pretty good scheme.

There is nothing wrong with the basic concept, it's the implementation and probability of reproducing the scheme that, in reality, is difficult.

Transaction fees as noted above - I assume he's talking about inspections, title work, etc - are non-factors in the grand scheme of things and should have little effect on whether you decide to split your funds into 2, 3, 10, or  whatever.

For one, they'll need to have an overall vision for the project and won't want to try to be matching the paint colour you chose once they've torn out all the kitchen cabinets.In some circumstances, putting on a fresh coat of paint and upgrading the floors garners a maximum return on investment.

Can I complain somewhere about his extortion scheme?

Granted that this is only roughly $700 and not a whole lot in the grand scheme of things, but shouldn't ones morals come in to play at some point?

I am now dreaming and scheming about my next property. 

Investing by it's very nature is:1. expend money with the expectation of achieving a profit or material result by putting it into financial schemes, shares, or property, or by using it to develop a commercial ventureInvesting is using money to grow money.

I try to use the same color scheme in most rental units to keep life simple.

I pay $2/sq ft for interior paint (walls, trim and ceiling) but this is for a 3 color scheme (walls are one color, trim is another, ceiling is another).