It's great for personal use, but I definitely am in need of a true architect.

If you were private money you might get 6-10% and have no control and not learn anything.If you want to make it work and be a true "1/5 partner" than do 1/5 of all the work.  

Turnkey is an excellent method to invest in Real Estate, it is important to understand your goals and strategy, then drill down the true meaning of turnkey for you, we can begin with:"Turnkey in simple terms means - a completed product or service that is ready for immediate use.

What is the downside to a conversion vs. true build? 

If something sounds too good to be true when someone is pitching a deal, you better investigate with due diligence.  

From a lending perspective, is this a true red flag for a lender?  

Jeff Beardvery true...

Lol, true...

If the investor doesn't buy it, it's just lost effort and money to me.Add in the fear that you will be asking for a discounted commission on the listing (almost always a bad idea) and the distrust that you'll buy the good deal and then FSBO it, lease option it or list it with someone else and very few are truly willing to work with flip investors.While it is true that most agents don't understand what an investor really needs in a deal, most "investors" don't ever really invest in a meaningful way. 

This may well be true, by the way.The other, weaker way would be to explain that by making a loan you are putting yourself in a debt position, which means a fixed rate of return (assuming the borrower pays, which we will for the sake of argument, ha ha).