That's not including soft costs such as carry, architectural, structural and utility engineering, etc.  

Look for soft/rotted wood or siding;  especially near the ground.  

This is especially true in the over $200,000 market which is soft due to all the oil layoffs.Houston also seems to be the "in" place to be for investors from all over the country. 

I figure soft costs; cost to purchase, holdings costs, financing costs, cost of resale come to about 15% So that means all in at $425K is break even.

See also https://www.biggerpockets.com/forums/585/topics/269437-20-oil-and-non-houston-marketsI think if you wait, what you call "some great looking deals" may be some greater looking deals... since the leading indicators point to some softness in the near future.

A hybrid between conventional and hard money, or soft money basically.

Welcome and try to do some deals on your own and you will have a better odds of soft money or hard money or even conventional ! 

Mid-end market, $800k-$2M will have some decent gain while $3M+ market will underperform going forward.The data has shown softness in the $3M+ homes in Palo Alto since 4th quarter 2015, which coincided with the pullback in VC fundings. 

For example, if your total construction costs (land, soft+hard costs, etc) is $150/sqft and you can sell your house for $200/sqft, then you make $50/sqft regardless of whether you build 1500sqft or 2000sqft.But what I have to assume is that at some point, the payoff is no longer linear and I'll begin to hit diminishing returns.

Problem is that if I sell, I will lose $6k immediately for a prorated soft second mortgage from the Cherokees.