Spec homes: Will this work? How to approach lenders?

[Jane Donaldson]

Hi, I'm completely new to this and I've read thorough the forum but I still feel completely lost.

I am currently a stay at home mom, but I'm in the process of getting my real estate license again (had it for a few years until the market tanked and then got married/had a couple kids-so the timing worked out I guess). My husband has a very good job and we have extra money each month (anywhere from a few thousand to $8,000 leftover after all bills) However, we have a previous foreclosure and are in a ch 13 payment plan for another year or two (although we could at this point pay it off) and so obviously banks and other major lenders will not touch us with a 10 ft pole.

I found some land in a very desirable suburb, 2.5 acres and is zoned for 5 single family residences per acre. Adjacent to this property is a similarly sized parcel that is zoned for a slightly higher density (6-8 homes per acre) and is currently being developed by a builder. They are doing presale and have several completed, sold homes as well as several that are under construction.

The builder's homes are about 3,000 sq ft, on micro sized lots and are selling for about 630k. They aren't fancy, I would describe them as an upgraded production home. (white painted millwork, middle of the road stainless appliances, some engineered hardwood flooring, builder grade vinyl windows, etc).

The parcel I'm looking at is 275k. All utilities are there. I contacted the water/sewer district and there aren't any major fees/assessments. I have spoken at length to a builder and I'm confident I could have a comparable homes built for 300k or less. I have no idea how much the infrastructure stuff would cost, and as you can tell I don't even know the proper terminology. But it is clear to me that if i can sell 10 homes for upwards of 650K each then I am looking at well over 2 million dollars in profit.

What I would like is to start with one or two spec homes. So I need 275k for the land plus 300k for each house. We have $50,000 of our own cash (I know it's piddly)
I am CONFIDENT that I could sell each home for over 650k- comps support that hands down. The market here has picked up and inventory is low. So for the two homes we need 875k and the homes should sell for a total of 1.3 million (conservative estimate). And then there are still 8+ lots that can be built on.

Is this even plausible? How do I approach a hard money lender? I'm assuming HM is my only option here? Will I just be laughed at? I need to learn the proper terminology and how to phrase things, where can I learn this? Where do I start???

Thanks in advance for your advice (and for not laughing at me)!