I would steer towards option 2, but I think your deciding factor is going to be finding a property you can actually BRRR.

They ride on a truck to get to get to the job site and they are built a factory with tighter quality control out of the weather.  

Pegatron Corp. — a Taiwanese electronics contract manufacturer that works with the likes of Dell, Tesla and Apple — appears to have settled on Georgetown for a large factory.
Georgetown-based Pegatron Technologies LL...

Now not sure what his overhead is to get to that number suspect 10k a month or so for marketing. then the other factor is he is VERY GOOD on the phone and closing deals. 

Ltd. at its Taylor factory, which is on track to open next year.He added in another post, "The $16.5B number is just the bare minimum.

Please reach out if you are an investor in any of these properties or any of the 14 properties already identified in this post.345 Flats, Kent OH       9 X 9, Provo UT    900 Factory, Logan UT     Campus Walk, Chico CA     Milano Flats, Rexburg ID        One on 4th, Stillwater OK         Rockland, Lawrence KNTailor Lofts, Chicago IL          The Nine, Memphis TN           The Ridge, Morgantown WVUniversity Park, Berkeley CA

Your program sounds spot on, I like the "graduating" to less restrictive properties, but initial intake into the most tightly controlled home.The NIMBY factor is certainly an obstacle, but can be overcome with persistence (of legal action to enforce one's property rights, assuming one is in a correctly zoned area).something that could be added is work outreach program, as the ability to find work after recovery is obviously critical.

My dad actually worked at that Studebaker factory. 

The cost will depend on the labor cost in your area, the permitting required in your area, the finishes the level of house you are doing in your area . . . the common factor is IN YOUR AREA.The old days where numbers were posted or printed in books is gone as the range makes things so very locality dependent. 

One determining factor is definitely the rise of foreclosures in the condo market in South Florida, due to the rise in special assessments from the HOA’s who run these buildings, and are poorly run with poor reserves, and therefore owners ending up with special assessments, sometimes huge ones, for usually deferred maintenance.