I did make the assumption that this was a US driven decision. I see that Stanners is from the UK but nothing in his/her post points this to a UK driven decision/strategy.
Can you point out where you feel I was inaccurate as you state "Second the advice they offered is inaccurate when it comes to when you can use a 1031 even if this was a US real estate deal."?
I`m not sure I understand where you feel the complexity falls in the finanicals to be able to help.
It sounds like you understand the product offering. If you are struggling with the upgraded product offerings that you can charge for, that is something different that financials. This is more of a product definition question.
If you know the premium services but are concerned with the take rates of the premium services, the idea of a business plan is to make educated guesses backed with industry resources. The plan helps you illustrate how the business has to scale pay for the proposed level of infrastructure (operating and capital investment). It creates an idea of what you have to believe to break even, become profitable, scale-up points, etc (X people buy Y services @ Z prices). I would imagine that most investors would like to see 15%+ Return on Invested Capital (ROIC) so this is going to be important. I would also imagine that a Break Even Point analysis would be key. If you can hit this on the head in a 1-2-or 5 year period you are darn good.
This is a bit more of a complicated question. This will highly depend on the market, supply, demand, etc. This is a situation where best guesses work well with lack of industry experience. If this is not a new service, there should be some competitive information that you can source.
I am a bit of a contrarian with this idea of a need to have a "passion" for your business idea or follow your interests. I would not fault anyone for undertaking a business for which they have a passion for the product, industry, etc. I would also not fault someone else who went into a business just because it is profitable. Read "Built to Last" or "Good to Great" by Jim Collins. Jim speaks to both extremes such as 3M where they really had little idea of what they wanted to do and Wal-Mart where Sam Walton had strong conviction for what he wanted to do. Motorola started out as a battery repair company, and look where they are today. 3M had to make sandpaper just to stay in business. The point is that many businesses such as 3M and HP were not founded in the businesses in which they became successful. Taking the risk, executing a plan and making adjustments as needed seems to be a common recipe.
Unless this is self funded, I beleive you are going to need a construction loan or creative style mortgage on the home prior to the approval of the certificate of occupancy. After the C of O is issued, you can typically convert to a conventional mortgage. Please keep in mind that normal Home Owners Insurance policies do not offer adequate protection until inspections are passed and C of O is issued. This obvisouly varies by carrier, etc.
As for Capital gains, I believe you would have to live in the home for 2 years for it to be considered primary residence and therefore not subject to capital gains. In less than 2 years, it would be subject to normal income, short term capital gains or long term capital gains depending on the duration of the investment.
I would strongly consider brushing up on the 1031 Tax Free Exchange (which is inaccurately named because it is a tax deferral not a tax free exchange). This is also know as a Starker Exhcange (or a reverse Starker depending on the transaction).
Most real estate books cover this very superficially (and inaccurately) due to some of the complexity of the provisions. They really are not that complicated with regard to what you are attempting to do. When you start trading properties, it becomes much more complicated. I have done a 1031 Exchange on a property that saved me thousands in tax obligations. The beauty of the transaction is that the longer you roll the gains, the lower the tax liability becomes at the time you cash out.