Also you should get some quotes to compare, state farm usually have reasonable landlord policy.

If not, I would recommend doing that and comparing the prices. 4) $900 in property taxes?

Look for vacant lots and get quotes on ground up contruction from a reliable GC.

Not to mention the fact that the convention center is a big draw all year, there is a thriving downtown, and the winters are extremely mild compared to a majority of the US.

The downside is restrictive guidelines, a ton of paperwork, lack of flexibility.Commercial types of financing have pros that are flexibility in guidelines and structure you can do all sorts of stuff from substitution of collateral to partial lien releases on blanket commercial mortgages to cross collateralization and many others, less documentation than conventional financing products, use of debt coverage ratio (DCR) as opposed to Debt to income (DTI) and if you compare DCR to DTI the commercial lenders go up to 80% DTI since the reverse of 1.25x DCR is .80 or 80%.There are downsides to commercial financing and that is the convenants with in the mortgage note that can allow the lender to call the note so make sure to read all the definitions for what substantiates a "default," by the lender you'll be surprised by the definitions and language at times. 

How do these compare to notes or syndications as far as risk and hassle and returns?

And I realize your holding costs are the opportunity costs of lost gains in current securities, but if you compared to risk withhard money borrowed funds, you are in much better shape!

@Carl Pickens  While not considered "conventional" I've worked with lenders who will issue a commercial loan with comparable rates to cover both buildings on the same parcel or even two touching parcels. 

I'm new but being mentored by a broker who did hundreds if not thousands of BPOs through the crash (broker price opinion, sort of like a non-official appraisal for bank foreclosure and other purposes) and really knows the value of adjustments and when to draw the "not comparable" line.

I wanted to know how exactly does this process break-down compared to conventional mortgages (using SOFI)?