Building a new home in place of a tear down property = equity?

[Ronnie Galindo]

BP community, 

I would have searched this topic but am at a loss of what key words to use so I come to this post (as well as possibly make some connections to people who have done this). So, I have noticed, over my months of searching for properties, several properties that have a home on it that is either a mobile home (which isn't desired in the area) or a complete tear down. So basically you are buying the land with the intention of demo-ing the residence on the land and building. Now I know if it is on septic and a well that you will have to take that into consideration for the limitations of that system thus you may have to put a whole new system in, BUT....

Has anyone done this? What problems arose? Lets say the tear down is on city water/sewer, what problems are you facing now? When you built on the land, did it create built in equity? I want to get into land development but have read some scary posts/blogs about it and don't want to have my capital (due to not having a lot) tied up for more than 6 months at a time so I figured "rehabbing" lands already developed could be a stepping stone to not only grow my capital but to also learns the ins and outs with building. Lets hear some stories and make some connections!

Thank you all in advance!