If your intent was to flip the property then you did not have the intent to hold it for investment purposes and it wouldn't have met the qualified use test or qualified for 1031 exchange treatment.

I'm reminded of an episode of Northern Exposure where they performed a test by burying someones arm in the ground for 24 hours and then seeing what was in his hand when they pulled it out.  

If they are an experienced flipper who says $30-40K, that means a whole lot more than someone who is just guessing.If they are just pulling numbers out of thin air, and your margin is slim to begin with, it is very easy to go over budget (in fact, bet on going over budget on your first flip) and erase all your profits.But therein lies the catch.

Please share them even if its something that you've considered but haven't yet tested. 

That means purchase price should be closer to $38750 with 9k in repairs accounted for already plus 1k buffer for contingency.Exit Strategy #5 - You may be able to some sort of cooperative Lease Option where you sign a lease with option then assign your interests to a handyman Tenant Buyer for an assignment fee to make a quick $2k - 3k and your out of the deal.There's no way I would stay in the middle of a deal like this with such a small profit up front, small cashflow and virtually no back end payout.Also, principal paydown wouldn't even come into play unless your holding the property as a long term rental.Again, I'm no expert, still learning the ropes myself, but the margins seem slim to me.Just my honest opinion.Jeff V

I think my main issue will be lack of prior new construction development experience but the pro forma is solid even when you stress test it for either low ADR and higher occupancy or vice versa. 

You also test your slab first to see if it is wicking moisture.

@Kyle Hipp, I'm especially curious if you're running your AC a lot in your test, as we have the same weather.Our dehumidifer is Energy Star, and we water plants with our dehumidifier water to try and save a little, but would welcome not having to use it!

Other areas that sell homes for 80k offer better options and yes pickings are slim here  but there are deals out there.

There is an interesting 10 questions quiz that I thought of sharing with you.So, if you have a few minutes, I challenge you to test your financial fitness as a current or future parent at the link below.http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/financial-fitness-quiz/article24937089/