The most I would be able to put down would be 7% and I'm trying to figure out if I should put the 7% in for the downpayment or just put 3.5% and hold the other 3.5% towards other investments/future property.

I think that advice will serve me well in future deals.  

About 60 percent of the funding would go to "future proof" flood-prone areas.

I can easily get that here in the US without the political and currency risk.Now if you could show I would have 10% yield with a likely 100% valuation pop in a couple years, that gets more interesting.

And, that might prevent you from moving out of your primary residence at a future point.  

I have no one to blame but myself for not participating in financial decision making, carrying credit card balances, being ignorant of our retirement savings and mortgage details, having no personal plan for my own financial future, and never creating a budget.

I know you have moved beyond this but on the chance that a similar situation comes up in the future I offer a few ideas.If you are really serious about getting a property then you need to leave time to make an informed decision which it sounds like you have realized.

I’ve heard rumours they’re trying to implement that in the future, which would be unbelievable but not shocking.

I am looking just as much for a contractor I can do business with in the future just as much as I am looking for someone for this specific project.It would be really great if we had a list out there somewhere for everyone on this forum with attorney, CPA, realtor, contractor etc. recommendations for everyone here to refer to.

@JEFF D. wish I could be more helpful to you, I have bought and sold 2500+ units and never had to do a Phase 2.As you finish out your due diligence period, and assuming you will sell this asset at a future date, a Phase 2 could limit the number of buyers in the future so give this 12 unit deal a real close look to ensure it is a solid deal.Good luck!!