I believe home builders lost a lot of respect and reputation in so cal because of these guys.

I want to be respectful of both involved, so is it fair to work with both, without telling them?

His knowledge and success are well respected.

The renters have been great tenants, they are on time with rent, keeps the place clean, and are respectful to their neighbors.

But I liked the person and wanted to give them my business as a tenant and I trusted they knew what they were doing and had respect for me.

It's my intention to work quietly...and go about my life with as much purpose and respect I can muster.I wasn't blessed with my own children.

Now, however, since prices have gone up so much on materials, I have adjusted to $20, $30 & $40 respectively. 

What can I say in a letter respectfully and without callous to marketplace this group?

Still respect them for who they are, but also realize that your dream is not their dream.

Typically you don't count your own labor cost as an 'expense' - but rather the end result of the calculation (IE: currently ~ -19/hr.)Had that been something like +10k net for 180 hrs you'd be at a more respectable 55/hr.It makes more sense than trying to do it like you're doing contract work and giving yourself an hourly salary estimate. :)That kinda changes if you hire people/partners/expand, depending on how you want to structure your positions (though its always cheapest to pay yourself as much distribution as possible rather than salary due to taxes... in the US anyway).