Mass development of neighborhood - Invesment? Good or bad?

[Molly Morlino]

I'd like to talk a scenario out and get some advice on next steps.

We have a great rising market in the Texas hill country - specifically Johnson City. There's hardly anything available and when there is it is very highly priced and in poor/old condition. I'm talking about a 900 sq ft 2/1 built on 1950s selling for $280k

We have lived here for 7 years and have watched this happen.

There are several new city lots that have come available - some investors created a small neighborhood (paved roads, city water and sewer) and are selling 7500 sq st lots for $32k. There's 11 available.  They are on the east side of town so in a lower-income area.  

I would like to buy these lots - all of them, hopefully get them for $29k or so - and build basic 3/2 stick homes. Slightly above builder grade (level 1 granite counters, laminate wood floors, tiled showers, etc), but the idea being that they are universally easy to sell. They would sell for about $250k. I think, with the volume of work (building all at the same time) we could build for an average of $120k each (1600 sq ft). This is "starter home" price in this town. Also with building so many we kind of create our own comps and market.

I have enough cash to put down 20% down payment on the lots and construction.

Thoughts? Next steps?