PLANNING:
If you want to know how to budget and plan your film than I suggest you buy 'From Reel to Deal" by DOV S-S Simmens. His common sense planning and budgeting advice is so straight-forward it borders on brilliant.
http://www.amazon.com/Reel-Deal-Everything-Successful-Independent/dp/0446674621

SPECIAL FX:
If you want to know how to do special FX on a shoe-string budget, I know of no one better to turn to than indymogul. These guys are the best no/low budget filmmakers in town.
http://www.indymogul.com/


CAMERA:
The DVX 100a or 100b or both decent cameras. However, they are not HD. Everything digital is going HD. To compete, Hollywood is going 3D.

Eventually, I will be purchasing the RED ONE camera or a sister equivalent.
http://www.red.com/cameras/

To my dull sensibilities, it looks better than film. The only problem is editing takes a workhorse computer with terabyte-level memory... Expect rendering times to take days, not minutes. Okay, maybe not days, but longer for sure. To solve memory problems just buy an external drive.

FREE EDITING SOFTWARE (OPEN SOURCE):
Look, you can get non-linear Editing/3D modeling software for free if you do not mind using a non-intuitive program.
http://www.blender.org/download/get-blender/

Check out the animated movie created solely with blender.
http://www.elephantsdream.org/

MY TWO CENTS:
Making the transition from screenwriter to filmmaker is much easier and infinitely harder than you can expect. Expect 12-hour days if you are directing, and sometimes 40 hours no sleep situations... The best advice I can give you is the simplest and most often ignored advice by indie filmmakers, "FEED...YOUR...CREW!"

And remember, if you have to cry, do it by yourself and be quick about it.

-Daniel

Sounds like you're making an action movie. I would suggest The DV Rebel's Guide http://www.amazon.com/DV-Rebels-Guide-All-Digital-Approach/dp/0321413644

Quoted from George Willson Boats and military does not equal low budget in most cases.

The military does everything for free, unless you count tax payers money. They are however VERY picky about who they will help out. We managed to get the Army's full support for both the skydive show and Women With Wings, but it was hard to get that approval. It took meetings at Ft. Bragg and one in L.A with some high up guy. Once they agree to help they'll let you have whatever you want. At least that was my experience.

I wish you the best of luck with investors. Times are tough right now and people are holding on tight to their money...I learned this too the hard way.

We have a distributor for our shows which is incredible since we don't have the shows finished yet, but there's a clause in the contract that says they don't have to represent us unless the quality is up to par. When I say quality I mean real quality. Something that can be on a major TV/cable channel or be shown in theaters. You might have something that looks passable on your pc, but it may still be far from the quality that they demand.

Anyway, it sounds exciting and I wish you the best of luck with this.

Retaining all the rights to it whilst finding a distribution company to send it on a theatrical run is an oxymoron.

What, I suspect, you really want to do is retain the rights to sell the film yourself in some capacity (online, DVD etc) whilst selling individual rights to other companies.

They are called hybrid deals and are becoming more and more common. You get a sales agent and you sell the film to different terrirtories...Japan, UK, Australia etc In the past you'd sell all the rights to the film to one company who might not have any gravitas or market share in some territories.

Theatrical runs are very expensive. Even the big companies typically lose money on them with their films. They are now essentially used as a marketing scheme for the sale of the DVD.

Some compaines are quite resistant to you keeping the rights to sell DVD's yourself (they ant to maximise their profits after all) although I believe it is possible to do that as in some cases the marketing that you put into the film to sell your own DVD's can help them, get more sales as well. That's sometihng you need to be able to point out with some clarity to them.

]Having acted as my own general contractor to "save" the 10-15% of construction costs that goto the GC to oversee construction of my own and my father's house, I can tell you that that was a very expensive education.

I advise against your brother's gung-ho plan.

Look around.
Many director/writers wait ten years before a pet project gets to screen.
And that's just the ones we've heard of.
I can't imagine how many pet projects have died an anonymous death.
Evan well funded projects with industry professionals die.
And everyone knows "problems" can be fixed by throwing millions of dollars at them.
Evan rubbing a few Benjamins on cop-calling, do-gooder neighbors makes them go away.

Hold your "Baby", write/complete/sell any one of the next dozen screenplays you guys have rolling around.
Surely you two have other screenplays in the hopper, right?

Maybe watch a couple other local movies being produced.
Volunteer on the set.
Scam all the experience you can.
Cultivate actual relationships (not just names and numbers on your cell).
Then go make your indie-prod "Baby".