I'm really looking to building and seeing how that turns out but I have to keep cost in mind to ensure I'm not at a negative cash flow.

What do you do to ensure that the tenant is responsible for security deposit disputes since that is the largest reason for owner lawsuitsHow familiar are you with the newly changed laws that can affect you the owner if they are not used correctly?.

For the effort and adminstrative burden of ensuring everything matches...I'd need a significant savings.

In this case, I'm left with $10k of my own money stuck in the deal.Furthermore, they're saying they ideally want to see an investor own the property for 2 years to ensure cash flow.  

@Uri Foox Id run the projected rents by a couple of property managers to see their thoughts, just to ensure things!

Also, if your plan is to rent it out, you would want to ensure you can still get sufficient cash flow with the new refinanced loan, since your mortgage payment will be higher.Here's a hypothetical example: Purchase Price $50,000.00 Repair $20,000.00 Down Payment (20% of Purchase Price)  $10,000.00 Initial Loan Amount $40,000.00 Closing Costs (4% of purchase price) $2,000.00ARV$100,000.00Refinanced Loan Amount (70% LTV)$70,000.00Balance After Initial Loan Pay-off ($70k - $40k) $30,000.00Closing Costs (4% of new loan amount)$2,800.00Remaining Cash ($30k - $2,800)$27,200.00

I feel I was successful because I never rented to college kids but rather targeted young professionals like myself to ensure they had a job to cover the cost of rent themselves.

Ensure the lease has some language that says these terms will survive the completion of this lease on a month to month basis unless a new lease agreement is commenced.

That way you can ensure nothing is missed.

Then if feasbile, they would basically design your retail space adhering and ensuring compliance with applicable codes with the filing (as an Alteration Type 1) which will amend the Certificate of Occupancy to add the retail into the lower floor.