A wise investor will be conservative during the peak of the market cycle when prices are high and margins are thin (now), and become very aggressive during deflationary periods when prices are low and margins are high.Be adaptable, don't box yourself in, the game is long and ever-changing. 

Also, I am in a position to reward good people for being good and create margin in their life for them to potentially create more with.

Purchase price at ARV - repairs, plus 3% per year.The low down payment is undesirable because it means thin margins on these deals in the short term.

I look at the numbers on these properties with 20% down to make a low margin profit and just can't wrap my head around dropping 70k on a 350k rental to get a return of about $800/month before any maintenance costs.

As far as my commission is concerned, I actually did consider waiving my commission to increase the profit margins for both sides, which is why I posed the question about the contractor’s profits. 

If the margins are there you will have no problem finding a partner to put up the money.

And with your margin of $40k projected profit, you have some reasonable wiggle room for some misses without losing money.Of course I can't see the current condition or what is needed.  

So the project is a mid size one and I have estimated the rehab budget to be close to the 3 bids and I am perhaps overconcerned about being overbudget (this may be due to the fact that the contractor bid things the others didn't and the bids came back inconsistent), because of the numbers I have.There may be some costs that I am not considering but I am not really sure how to approach a contractor about being as cost effective as possible with the material and not affecting their bottom line,  so there is a margin for error in my numbers.  

@Alberto MoraviaOne of the goals with rental real estate is that the investment doesn't negatively increase your tax burden.If you are making other sorts of investments(Stocks or bonds), the dividend/interest income would be taxed at your marginal tax rate(Assumed high).Rental real estate income hopefully is sheltered.

If you are buying from an investor it lets them spread their gains over multiple years.  2)  IRA investing we have bought long term holding in our self directed IRA's.  3)  We have borrowed from other investors with self directed IRA's that would rather lend than own.  4)  Margin loan from a brokerage account, if you have a personal stock portfolio you might consider setting it up to allow margin lending, then make payments to yourself.