@Russell Brazil and @John Weir and @Nick HullWell maybe my memory is failing me which deal of mine this story relates to, but I remember drawing a purchase agreement on a private deal I had with a home owner who lost their house to a flood in 2011. 

Well you can drive around Memphis and find many... failed landlord syndrome is very evident in those markets.. and the lower the rents the tougher the tenant base and the ability to succeed is.I had a friend from Oregon ( against my pleading) buy a 40 unit in Memphis.. 

I tried contacting them through email (but it fails to get to them) and I left a couple messages on 2 different tel.

This failed only due to City code requiring specific footage on the curb per APN.

Good contractors wont install the cheap materials , then those cheap windows fail you will blame the contractor  even though its not their fault .  

The buyer has a responsibility to inspect and verify what they are purchasing.If the problem was "reasonably apparent" to an observer, then you may be liable for failing to investigate.

Missing shingles, messed up flashing, etc...It could also be a leaking (inside the wall) water pipe, or leaking drain pipe, failed toilet wax ring, or bathtub drain pipes leaking.You might want to budget for a scrape and paint  too.

I have also asked on several occasions to get an updated completion timeframe and final (hard) budget number and the contractor is failing to do so.

@Melissa Block I may have missed it in your analysis, but many people who haven’t had a lot of experience fail to account for holding costs, staging, and other expenses that can easily add $10-$20,000 to your overall expense structure

But they prefer for that 1st new construction job to be a single family in which costs are in the low six figures to build.To start with 2.5 million, you'll have less lenders willing to take this on, not only would you have to come with that huge down payment, you'll have to show you have enough to cover the loan if the project fails.