The goal is to have this home pay for itself and eventually be able to retire to this house full time in about 10-12 years down the line.

It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees.

If I sell for $250K, how does that get divvied up between profit and paying off the mortgage I took out? 

No buyer is going to come in and be willing to pay an assessment unless they are getting a deal on the unit. 

I spoke with them, and it seems like you are paying them 1% to help you go through the process... that's about it.

Doing the right thing is expensive, but it pays off in the end.

Now you need to figure out how to find deals and pay for them.

As long as the city does not hammer the builder with connection fees  ( or waives them would be best) I can see this working well as long as folks will pay that much to live there and of course Schools will dictate how well it will do long run.  

Essentially, the buyer wants to pay my equity out of the property at lease signing then have a option to buy the property after 3 years.

As soon as a tenant gets behind on rent, enforce the lease strictly by sending proper notice to pay. 4.