You can always go back to the owner with an adjusted # if it comes in lower.

If you really want to do a quasi owner finance for your friend to pay off the property within 3 - 4 years, you could simply set a monthly rent that is high enough to accomplish that goal, do a 6-month purchase contract and reduce the purchase price each time by whatever he's paid, with a handshake that you would adjust the actual purchase price, if he ever decided to finance it in the middle of a contract term.  

The plan is to find a place to rent month-to-month while I intensely look for a job.  

My advice, find out about previous repairs, if house sits on expansive soil or what type of land it sits on and if on expansive soil, pass on it because you will constantly be throwing thousands of dollars towards beam placement or adjustments.

In my experience, development is a time consuming and oversight intense process.

Adjusting seller expectations will have you walking a fine line between reason, and emotion. 

Any comps that are less than perfect must be adjusted. 

I figure this would be much more beneficial to have the plan laid out for the investor and be able to adjust it, rather than start from scratch from day one.

., anything affecting the profitability of the project, Will there be an adjustment made to the profit participation of the investors?

Also, the argument has been made here on the forums that the "1% rule" is geographic - it applies in some areas, in others it is more of a guideline, and 1% just isn't common here without some intense amounts of luck.