In a waterfall, the GP is incentivized to stay the course, gambling the LPs equity, because the GP only makes money above 7%. 

What is advantageous is someone that is good at underwriting and unbiased (only analyzes the deal based on the underwriting without other emotions).Note i have a fair amount of experience and plan to place a competitive offer tomorrow that the underwriting dictates not placing a competitive offer.  

This is my gamble.

People mentioning that they put their life savings in something in hopes of a better future is gambling.

Fair market rent for these is $800.

•Offering fair and reasonable terms that aren’t predatory.However, if you’re selling to investors or non-owner occupants, these rules generally don’t apply.2.Use a Licensed Mortgage Loan Originator (MLO)•To finance more than three owner-occupied properties per year, you’ll need to work with an MLO.

I think the charge is fairly nominal from what I have seen.

Because they are gambling.11. 

These are very risk gambles that should only be attempted with money you don't really care about.  

You should be able to get a reasonable idea of the construction cost fairly quickly.