Buying land and selling it to builders

[Jack Montague]

Hello,

My partner and I have recently come across an opportunity to buy a plot of land for a group of home builders. The deal has since changed, and now we are unsure if we should proceed or not. Originally the deal was as follows: We buy the land, a construction company builds the houses and a large end-buyer would purchase the homes and rent them out. The end buyer was going to pay for all improvements on the land. Since then, the end-buyer has backed out of the deal. The builders now want us to pay for the improvements and infrastructure and the homes will have to be sold on the open market.  

We were planning on financing the land purchase and paying the note while infrastructure was being built. But including the land improvements will significantly cut our profit margin. We also have concerns that the builders will not be able to construct and sell the homes in a timely matter. 

This would be our first attempt at land financing, so we are wary about proceeding. 

Has anyone else had any similar deals? If so, we would love to know how you set up the deal. Do you have any do's or dont's we should be aware of? Things we can do to protect ourselves?

Thanks.