New construction costs can vary on several factors - land development, total sqft built area, on-site/off-site utilities, retention/detention area, covered/open parking, type of foundation and the list goes on.Do u have all permits from your City/County?

I believe owner financing is quite common in this asset class due to the issues with financing.

That alone is about 15k to get utilities to the other lot.

The utilities are worth 6-7k

Any utilities?

What I find is that the banks just want too much money for houses that need too much rehab.Is there some way other investors are getting access to properties that aren't on the MLS, or these common sites I mentioned? 

The reason being is that one of the option for reducing taxes on active income (such as flipping) is by utilizing an S election...which is an election made on an LLC. 

I have never owned a home, so I have no real assets to put up to be approved finance through a hard money lender. so my question stems, should I use a FHA  loan for my fist investment (and home) for a buy and hold property , and then later utilize a hard money lender for additional Buy and hold investments?

The owner estimated the costs, utilities, maintenance, and repairs to be approximately $35k per year as he pays all the utilities for the tenants.

There is a little red tape with the rental license in Duluth, but all major cities in the Midwest have them - it common in the region anyway.