You may be able to walk away calling it a material issue, but it's a pretty thin one to most people in the industry.

So unless your plan is to move into one of these homes you might need to look into alternative funding options.

You should get quotes with a smaller spread.Some difference in cost can come from one company expecting you to supply materials and another supplying their own.Honestly unless you have some higher end fixtures, even 13k seems high without the service in the scope.

But in general, your dings to cash flow are:repairs and maintenance material and laborManagement FeesInsuranceReal Estate TaxesInterest ExpenseLoan AmortizationAnd getting the price down will help, but if you are primarily focused on CoC, your goal should be less money down. 

Does anyone have experience in leasing for corporate housing or other alternatives for higher end properties that won’t likely meet the 1% rule with a standard long term lease?

Alternatively you may want to be passive and invest in syndicates.

Also, consider alternative means of acquiring properties like Driving for Dollars.  ;-)Are you planning to manage any rentals yourself? 

Those are some good material to read.

I gave him a check to start the labor as well as a check for the material he was providing.

An alternative would be to find a single-family home with enough square-footage to do a permitted accessory dwelling unit (ADU).