It is not a scam, but you will have a very hard time finding a deal that is worth working with them, and frankly you are going to have to find someone that does not understand at all what their property is worth and get them to accept a super lowball offer to make it worth it. even then their points and fees will eat up so much that getting the 10% down loan will have a much much higher profit margin.

Which investment strategies are you looking to pursue?

It started with really buying my own personal home, then selling and making a small profit.

The more you put in, the more you have to recover before the PCF is actually a profit. 

They need to add 25% in order to get the 20% for  Overhead and Profit.

I am sure it will all work out for you in the long run.. we sold ours and made a tiny profit on each but its better than a loss right ?

Theoretically, they split any profit.

I do not want to sell because my profits after closing costs will be about $15K.

My understanding is profit from lending is considered "taxable income" and is therefore added to your income and subject to your normal tax rate after all deductions, etc.

@Jay Hinrichs exactly the risk is even more than traditional development and the profit is actually less with more operational headaches.