What are the major variables we should consider? 

Second floor need some Renovations but not major.

Here in Houston gurus, new investors, old investors, established investors all talk about the 70% rule and how in order to get a profit the "numbers" is what matters.

We had originally thought that Bob could lien the property for the construction costs, but, the profit will be directly related to what they end up selling the property for, which is usually an unknown until the final hour.  

If it is just the business and not buying a building or the land beneath it then it is not generally a real estate licensed activity.You need to check for each state what is or is not required.You could go on a site like Rocket Lawyer etc. and for a nominal fee ask the question.In commercial real estate transactions you can generally have consulting and other fees on the HUD-1 as RESPA does not typically apply.To look for more businesses you could look at bizbuysell.com  Sellers typically want 3 times gross profit earnings so if 100k a year after expenses they want 300,000.

A tax lien state you are bidding on properties knowing that the large majority of properties will get redeemed and you will get a small percentage of properties.Most wholesalers buy lists of addresses and send out a mass mailing trying to connect directly with a motivated seller before their property goes to a public auction or gets on MLS.

The problem you may encounter is this will eat into your profits given the small scale.I know what mean about the challenge of going after a "turnaround project" that is remote...  

But They seemed to specialize in providing funding through private investors which states they will take 1.65% of every profit on each investment.

We also plan on partnering with a friend to help with initial investment, cosmetic rehab (we plan to do the work ourselves and are not looking to knock down walls or anything major), splitting property management responsibilities, etc.I am hoping the community can help me out with some questions that I am still trying to tackle.1)  I am struggling with the financing aspect of acquiring a loan with a partnership.  

IMO, stay away from the major national VA lenders, most of their LO's are not experts and don't understand investors and house hacking and setting you up for success.