I do see quite a bit of new construction in the area.Down Payment @ 25% = 48KClosing and other costs = 19K (Includes 6K finders fee)Income Rent - 1800 pm = 21,600Vacancy @ 6% = 1,296Tax = 1550PM @ 10% = 2150Repairs @8% = 1,728Mortgage @ 4.75% 30 yr fixed = 8,860/-, Interest - 6,675/-Net cash flow at 250/- per month or so.

@Rick Maningas I just found out I am not splitting net profits 50/50 at all; it was just the construction cost of $40K ($35K with $5K for cushion for unknown) and the 1% realtor fee for himself for when John sells the property.

This is a business and they are the back bone of how you should be operating your business.  

AE fees typically run about 7%-10% of construction cost for commercial work.   

Furthermore, if the building is a new construction they also require payment of transfer taxes as well.  

@Chad Justice,Welcome Chad.You have indeed came to the right place to network,learn, and advance your REI career.When I started many moons ago I too knew some things about construction, trades, remodeling,ect.What I soon found out was that was just the tip of the iceberg.Done correctly REI is about a lot of moving parts.Finance,Law,Marketing,Research,Evaluation are just some of the things you need to educate yourself on toward the strategy you are interested in.

I went through some ill equipped contractors, some dishonest subs who took the money and ran, and stumbled through a 70k full gut not knowing anything about construction while working a full time job.This project took me a year to complete and i learned so much about the business.

I am 59 years old and I have been in the construction business since I was 17 and I had a brokers license for about 30 years but I have only done one investment deal so I do not have the experience you are looking for.  

It has given me hope of making a living part time with my experience, both in real estate and construction and business ownership.  

Teodosio and Sons construction Company-llc