Homeowner partnership with General Contractor to develop lot

[Jacob Wyatt]

Hi there BP community! 

I currently own an old house in West Seattle, WA on a LR2 zoned lot. I am considering the option to partner with a General Contractor, demolish the current house, and build 3 homes on the lot. It is a 4000sqft lot and could hold 3 $780k-$825k homes. I cannot finance a project like this by myself but am curious if anyone could lend a hand with connections or insight on what would be fair terms.

I owe $350k on my home and am in the process of applying for my HELOC that I am thinking I can get about $200k out (if it is needed). What I would find ideal is to partner with a contractor, use some of my funds and some of their funds (or their investor funds) to finance the build. I would like to walk away from the deal with my current mortgage paid off and owning one of the homes outright for myself. So structuring the deal like the sale of two of the houses would pay for my mortgage, real estate commissions, demolition and construction of the project, etc... and the rest would go straight to the partner. I estimate around $220-290k. I will also be completing my real estate schooling and expect to be the listing agent for the houses.

Has anyone heard of deals like this or find this reasonable/enticing for a partner? 

Thanks BP!