However, upon transferring it back to your dad, the basis is not relevant anymore.In the end I would highly recommend you reach out to a tax professional here to get this sorted out.

Cost to build today would be prohibitively expensive for the return, especially for a non-experienced developer.

However, due to crazy high rates and housing inflation, I still live in this house.

Real estate continues to be high where I am located and when I calculate the mortgage payment with 20% - 25% down, it only breaks even with the rent I could collect. 

I agree with the sentiment of "you must be highly organized." 

I live in Northern NJ and as I mentioned the barrier of entry for me in NJ is too high.

Luckily I stayed in the car and they let me drive away.The problem with some of these C class areas are that you're going to get high vacancy, evictions, and high turn costs with tenants damaging the property. 

It seems as though the only way to get a return right now is to buy something in full and then refinance in a couple years when hopefully rates are lower and you can redeploy that equity again.

Having a 24 month term on the front end will also make my job easier doing the take-out loan when it's time to refinance into permanent debt, because there's room in there for a full year of tax returns to have been done in the middle (if your exit plan is to sell, it'll also make it easier on your buyer who will presumably be willing to pay a higher price if they can get an A-paper good mortgage).Ask for a 24 month term, tell your contractor you want it done in a year (and make it financially worth their while if they can pull it off), internally/mentally plan on 18 months, and I'm putting you on notice now to do your tax returns on time, rather than extending them (don't fight me on this, please just do it).Trying to get a renovation mortgage like this for only 1 point is likely a waste of your time, but if you want to ask, after you've secured the above as a 'done deal,' go for it, can't hurt. 

(probably not-they've got the 'high-ground')But like my dad used to say: "Ya don't know how far a frog will jump, 'till ya pock it!"