If not, it may be worth it to pay them a small fee to walk through the property with you and provide their guidance/expertise.

I know you will find a ton of encouraging and helpful people here.Regarding HELOC I suggest you connect with my good friend @Michael Barbari...I believe they can still do up to 90% which is 10% more than most banks.If you need any other specific connections here in Chicago I am happy to provide them. 

Prospective residents could be required to answer customized landlord questions while also needing to provide a valid credit card prior to entry.

Section 1.165-1(b) provides that, to be allowable as a deduction under § 165(a),a loss must be evidenced by a closed and completed transaction, fixed by anidentifiable event, and, except as provided in § 165(h) and § 1.165-11, actuallysustained during the taxable year.

They are being "sold" on real estate providing so much tax benefit that it includes deduction against their regular income...

You're providing a home, not just a house.

Additionally I would have countered trying to make my offer more attractive other ways - i.) waive financing contingency, ii.) show poof of funds, iii.) increase earnest money, iv.) offer to pay any short in appraisal up to a certain amount (say 1% of offer price), v.) provide a low-ball offer but with an escalation clause (you'll automatically pay X amount higher than highest bidder), vii.) say you'll pay for home as is without expecting them to fix home. 

I do not know if any of the closing costs or construction expenses make their way to the working partner (e.g., if they're the selling agent or own the construction company, etc.)If all estimates go to plan, then the 55% net profit should provide an 18% annualized ROI for the $1M, but likely lower.

I really appreciate any help you can provide.

My goal is to build a portfolio that provides as much income as possible within the next 5 years, so I am thinking STR.