I’ve got a contractor for that who then looks over the report and tells me what it’s going to cost to repair the things that I deem necessary.

You can also bill them for the additional costs for leasing agent, listing, etc if you have any of those. 

The best quote I’ve  gotten back is 7.25% 30yr, closing cost 5k, 25% DP requirement, 5 year Prepayment penalty.

The payout on these loans buts contracts at a tricky place having to absorb some of the initial costs while waiting for the drawls to occur.

Costs the same to put on a new roof. 

My realtor/PM says $0.95 to $1.05 per sq. ft. is a reasonable monthly rent for a 4 BR/2 BA property in that area, which (according to the BiggerPockets calculator estimate I did) is enough to cover the monthly payment plus the above costs I mentioned.I anticipate putting down my deposit and earnest money in the next few days. 

However, the intrinsic cost of this "sweetheart deal" is dealing with a small bank underwrite.

We've found funding for the construction costs, but not for the actual lots themselves.

Depends on whether you're looking for cash flow, appreciation or both, what cost of entry you prefer, turn key vs. needing rehab....there are good and bad areas in every state. 

Others differences that jump out: loan parameters are stiffer (usually 20 terms on a mortgage instead of 30 year), commercial insurance will be more expensive, appraisals will cost a good bit more.