Focus on the accuracy of the CAP and if 6.125 works for you then plow ahead. 

A little much, no?

It's often more expensive but can work if the cash flow from the properties supports it.3. 

I get the gist of this but not completely sure how it works out also would it be smart to use a private money lender for gap funding in order to come with the capital needed to get approved for the fix and flip funding?

It's been pretty tough to find anything that cash flows lately, so we're going to move ahead despite this after being told it's not an uncommon situation in this particular submarket.We'd like to try and up zone so that it's no longer non-conforming.

If you are reporting it on a schedule E (you are not taxed as a corporation or as a partnership in non-community property states) then no, there is nowhere on your tax return that shows your cost basis and your tax preparer likely doesn't know. 

Working on our 5th one right now. 

I have the ability to get these units built at very favorable costs and there are no real comps I can find so I am at a loss for planning my development strategy with regards to the size of loan I could reasonably get.This will be my first project and my partner's third but he self-financed the two others.

Know the lenders requirements for the loan types you will need.For instance you may find you need to have liquid cash of 9 Months P&I and 100% of the loan amount as your personal net worth in order to avoid personal guarantees on the loan, and your retirement accounts may not count towards your liquidity.Know the requirements of the loan products for the apartments you want to buy.There are no books for that, that I know of--just lenders info.Because without that all else is just scholastic exercise.Good Luck!

For example, I work with investors looking into new construction duplexes in Indianapolis, which offer solid rental returns and less upkeep compared to older properties.