You have to include the cost of your time and the work, especially on a "scary house" is daunting indeed. 

But, these broad market studies are so large, they are almost meaningless, in the real world.Between glut of new supply in many "hot" markets coming online, a continually softening economic outlook, inflation over last couple years making day to day items feel cost prohibitive, many average renters are strapped and seeking lower cost housing.  

At the end of the day; you need more money to do something like this.MAX LTV on new builds is 80% LTC, Meaning if the build is $550,000 and Land is XAdd ($550,000 + x ) * .8 = LOAN AMOUNTYou would need to come in with MINIMUM 20% of the cost in addition to closing costs and reserves, $80,000 is not going to cut it for this project.

We currently work with many clients who do Cost Segs and using that STR loophole!

Quote from @Dylan Webb: Have you talked to a lender to see what it would cost you?

The concept makes a lot of sense but paying $700 a month to network is quite the cost/commitment.

Imagine making millions of dollars over the course of your career and then having to pay 30-50% every year to uncle sam instead of compounding that cash over time.This is exactly what real estate professionals have learned to mitigate.To reduce their taxable income, they just buy a building every year, do a cost seg, and use depreciation to reduce their tax liability dramatically.Their personal wealth snowball grows much larger and much faster than their W2 counterparts who give most of their money back to the government each year.Following this strategy as a real estate professional is one of best ways to end up with a much larger net worth at the end of your career.

Am I more likely to be able to add $50k or $100k of value above cost in a high Cost RE market or a low cost RE market?  

The key is making sure the deal’s numbers work, your profit should justify the higher cost of capital. 

Also, how do you balance cost-effectiveness with providing a high-end feel?