My question to the BiggerPockets community is if this is a common strategy?

There are three common ways, one is to do it strictly on an hourly bases, another is lump sum (usually based on their in-house calculations on who needs to work on it and how many hours they think it will take to complete) and lastly they could do it as a percentage of construction cost (usually in the 5-10% range, could be more).  

@Jeff CantrellMost commonly, It’s mixing of words and definitions between cash flow, profit, and income.You can have positive cash flow but after non-cash expenses (depreciation and amortization), you won’t have to pay taxes because your depreciation expense wipes out the positive income you would have had.

It is very common for background interruptions including repair or maintenance being done.Also consider the upside of working from home.

Your CPA is giving you very risky advice that goes against legal precedence and common advice. 

I remember 5 or 6 years ago it was quite common before all the politicians starting implementing laws that made it tougher on companies that dealt with more than one state unless they happen to have the same laws.

FHA is the most common as it allows only 3.5% down... but once again you must live in the property. 

If you want to defer all tax you must purchase at least as much as your net sale and use all of the net proceeds in the purchase or purchases.So two very common 1031 strategies are 1.

And don't think that rules or threats will help.Patch the holes and be of service.If it's a common issue, then you decide if you need to get restrictive.Good luck and remember that when we were kids, adults were stupid too!

Low caps or or near break even cash flow is common in hot real estate markets/big  cities especially if you are looking for something turnkey.