I do see many investors incorporating a similar strategy with new construction builds, heavy rehabs, or in instances where the property was bought far below market value (usually a wholesale type transaction).

The 10k is the difference in the points.With lender 1 will cost 10k more in points.Lender #2 is kind of unknown.

What kind of ROI i should look at, considering project completion will be 3 years roughly?

Is this just some kind of handshake deal? 

What changes did others incorporate into their leases that were influenced by this years tenant interactions? 

It isn't doing "SubTo's" that is illegal, it's how they are done and how they are treated and what your assumptions are and what your unpredictable seller does.Attorneys love these kinds of fights.

As far as some other comments about like kind etc, you can sell this SFR and then buy a warehouse, or vacant land or even exchange into a DST there are many other assets that are considered 'like kind'.

What kind of commercial properties are you looking into?

Quote from @Todd Knudson: @Ben Trageser, thank you for your kind reply.

Hey everyone,I'm in the process of purchasing a multi-family apartment building and just discovered none of the current tenants have any kind of move-in inspection.