Trust your plan.

Conventional would allow you to add a fence or do yard work in your bid.I cannot lend to you personally in MA but happy to answer any general questions about the 203k or other Renovation loan programs!

We plan to share ownership of the property as I am going to invest my money into developing (building a Detached ADU in the back) and re-modeling the property so that we can collectively sell it for a profit.

Quote from @Nathan Nathan: Hi, I am planning to create LLCs in Wyoming , Michigan and Georgia.

Earlier in your post you shared that your friend planned to pay the contractor invoice but at the end of your post you ask whether your friend should pay the invoice in full.....and this is after selling the property and presumably being recapitalized. 

I don't think Im paying my bookeepeer an outrageous amount, although with economies of scale (I have one commercial insurance plan, commerical portfolio loan from a single bank, one bank account, etc) it probably doesn't take the Bookeeper 3x to do my books compared to yours. 

I plan to use it as a rental property, but I'm concerned about the location—Bullhead City, Arizona.

It’s also unclear if they plan to order another appraisal.

Sure, some voucher recipients game the system (years ago, I had a tenant who knew exactly how many hours she could work and how much income she could earn to remain on the program).

My plan is to maintain the status quo and benefit from annual rent increases and equity gain as the tenants' rent covers the mortgage.