Subdividing Deal - How to structure this?

[Daniel Karbownik]

So I have been presented with an interesting situation.  In my local neighborhood, there was a zoning change back in 1981 that said any new lots, or lots that exchange hands, can not be subdivided.  Most lots are 100x100, and some are 100x200.  However, any lot that already existed that was 200x100 was, and still is as long as it didn't change hands, zoned SF-10, and was grandfathered in to be able to be subdivided today into 2 100x100s.  

The owner is an out of town executor (the property is in Jersey, he lives in Texas) and the property has sat vacant for 5 years.  I recently met up with him when he came up to get some stuff from the house, and he's ready to get rid of it.  He is willing to hold back a note (not ideal for him, but he is open to it), and he said he would be willing to subdivide the lot before the sale as long as he didn't have to put in any of the legwork, basically just sign the papers.  A buildable 100x100 lot in my neighbor should go for around 100k, and the existing house on the lot now is about 160k (about 900 sqft 2bd 1ba - good rental potential).  I have been quoted figures between 5 - 10k to get the subdivision done.  

I don't have a ton of capital for this deal - maybe 10, 15k tops, to be able to invest.  What's a good way to structure this deal?  My end goal for the deal is to profit off the new lot, but also hold onto the existing house as a rental.  Here's my idea:  put in the legwork, as well as pay for, the subdivision, to show some skin in the game.  In return, he sells me both lots for the price of the current lot, about 160.  He holds back a note until I can flip the lot, take some of the proceeds, refinance the rental and cash him out.  Does this make sense to do? for both sides?  

I understand he may want more for the lot once it's subdivided, but he is going back to Texas on Tuesday and wants something in place before he leaves.  He will not subdivide on his own because he doesn't want the headache.  If somebody doesn't do it for him, he's going to list the house on it's current lot at 180 anyway.  Maybe it's fair to offer him 200 for both together?  

Thanks for the input everybody!  Clock is ticking on this one!  I have to put something together for Monday for him.