First timer doing a spec build

[Albert Han]

My best friend/business partner was gifted a property in La Habra Heights CA that his dad purchased back in 2018 for $540k. His dad demo'd and grated the property and spent the last two years going back and forth with the city on the plans and thinks hes spent between $750-800k all in so far. Several architects, my friend and I all agree that the layout of the home was designed very awkward and not very well thought out. With this we will either need to hire a new architect and start from scratch or hope for an amendment and hire another architect who will change the layout of several of the rooms in the house. The lot is in a good location at the end of a cul de sac with close to an acre of land. The home will be close to 5k sqft but a drawback is that it must only be 1 story.

This same friends dad has a GC license which we will use and he also owns a building materials company so we will be able to get a lot of the materials at a lower cost. 

We are expecting this buildout to cost nearly $1.5 million which he is proposing that I provide entirely as his dad is in for close to $800k not including the sweat equity over the years along with being able to use his dads resources for materials and such. When he proposed this idea to me several months ago he said we would be going into this 50/50 but it doesn't seem like a 50/50 split to me, or does it? 

I understand that we're heading into uncertain financial times and as a first timer, i'm wondering if this is the best financial move I can make with my money as it will cost nearly every cent I have. Before this opportunity presented itself I was planning on using this money to purchase a turnkey rental somewhere either in CA/NV/KY.

At the best case, if we are able to get an amendment to the plan, i'm estimating the property will take a year and a half to build out. Depending on the market conditions, we will sell or hold the property. But I cant help but to feel that this money deployed elsewhere would yield better returns if the economy does take a dive. Is there a formula that would help get a better idea if this project would make sense? 

Any insight would be greatly appreciated!