My area is Austin, TX (this particular deal is in a community about 30 minutes from Austin) and my deal involves potentially building a new duplex to hold for rental income.Expected rent is $1500 per unit for a total of $3000.I own a multifamily lot, for which I paid $22,500.I have paid approximately $5,000 for plans and engineering designs.I have been working with a realtor who I have promised to pay a 3% commission on construction costs.After talking to what seems like just about every builder in the area, it seems like the best I can do for construction costs is about $325,000. 

I have 3 drop shipping businesses that I've started in the last 4 months and have some very promising investments in crypto currencies that I believe will take off in Q3 of 2018.

As an after-thought, what are the pros and cons of just holding their money and promising them an 8% return?

And if you can get that same Seller to agree to keep their mortgage in their name, while you give them $40k cash (from a Hard Money Lender) while also promising to pay their mortgage for them, even more kudos to you!

I can promise you that the appreciation in your area will end and that values will go down considerably.

Any other towns you think look promising?

Thankfully, the seller permitted me to do due diligence on the gentleman, and looks like promising tenant - based on the application he has filled out.

Alternatively, you can talk to your tenants and make a deal (this is the practical solution, I think) and offer to accept half the total rent (by sympathetic-ish to their "plight") as they have promised, as long as they do clean up the place and do not trash it before leaving.

I owe the private lender $58,480, meaning I have to fork out $34,751 (the balance) to own the title clear and fulfill my promise to the investor. 

Some new syndicators promise the moon trying to land funds but if you never get the promised high returns it means nothing.