However, different lenders may have tighter restrictions (overlays) and different loan processing fees.  

The builder told him that if he uses the builder's realtor, then the realtor would take a flat fee of $2000, the rest would go back to John towards his closing costs. 

@Julia Vang Hart Make you to get several bid proposals and consider elements such as: inspections, how late fees are split, vendor mark-ups, and lease renewals.If you need help, please let me know.

PM fees seem like they will be adding up to $7500+ a year ($5,400 in % fee and another $2000 in new lease fees), which doesn't seem justifiable to me...

Between the annual reports and filing fees, and also the overhead necessary to maintain separation of assets so the corporate veil isn't pierced, the cost-benefit just might not be there.Might make the most financial sense (and most streamlined) to run her as a sole proprietor (Sch C) and carry appropriate and adequate insurance, which you should be doing anyway with an LLC. 

That means you'll be dealing with vacancies, evictions, and fees to get your property rented to new tenants.

Why is it standard practice to charge origination fees/points upfront on the loan?

Compare that to a potential $4k/year cf, it would take almost 5 years to get the same money you would if you sold (assuming 15% fees/commissions/closing).If you reinvested the profit from the sale, you should be able to still get the same or better cf in a different property.

I estimate the acquisition cost of land, construction costs, and furnishing fees to be 450k, and would like to know what approach folks would recommend.

I have considered any and every expense associated with the project, including credit card/paypal fee's, credit card interest payments, travel expenses.