Land purchase for future development.

[George Bruton]

A close friend of mine's family has a 11 acre plot of land in a large city in Southern California.   Back in 2008, Lennar was going to purchase the land for a housing development due to location(city) and it was directly across the street from a public elementary School.  Due to the downturn, that deal fell thru.    The family never sold and now due to a death in the family, the kids are discussing what to do with the land.   Being close to the family they asked if I would be interested in buying or working with them on developing it.  (something I know nothing about but I do have strong relationships with large developers who I could take the deal to eventually).

It is currently zoned for 1-acre parcels for residential and they just had the land appraised at $1.9 Million.    

I know the land would have to be rezoned to build significantly more homes to make it worth it, but how would one go about valuing the land? And valuing the land if the cost to rezone has to be included?

Essentially, I have the opportunity to work an off-market deal that could turn into a decent return if I can structure the land purchase correctly.    

How does one go about valuing the land?  Homes are selling for around 400-600k in nearby developments.  

They are open to seller finance or would like to be included in the potential upside of the development with their contribution being the land if they could receive around $300,000 up front due to the fact they are not financially well off and the cash would help them significantly. 

If anyone has experience with this What/How would you structure this deal and What would be your view on the purchase price of the land?

I would like to point out I understand development can take years and have no expectations for this to be built or completed in any short period.  

Thank you,

GB