A lot of the problem comes with the initial financing of a development because all you have is land. Banks don't typically loan more than 70% (usually 65%) on raw land and then the same amount on the improvements. So, if you buy some acreage for $1 million, you are going to be able to only get $700,000 at most for $300,000 out of pocket. Then, let's say the improvements (survey, streets, sewage, water, etc) cost another $1,000,000, (with $700,000 financed) then you are going to have to spend $600,000 out of pocket for the entire project, plus interest and if you are paying 5% interest, you owe the bank the original $1,400,000 along with $70,000 in interest plus fees and you haven't sold anything yet.

I am curious as to how much the lots in this development will cost. Gaillardia lots usually run $125,000 or so, but these are smaller and the homes will be closer together so probably $100,000 or so. Then, when you sell one lot, the bank usually requires at least 70% of the sales price to be paid down on the loan. As you can imagine, a development of this type could take a lot of time. I would say at least two years from purchase to when we start seeing more homes pop up and that's if they are priced right and are in demand. The whole thing could easily go into foreclosure if they don't have the right backing.