Opportunity with Vacation Rental

[Account Closed]

I have a family member that is offering to sell me a 1.5 acre piece of land in a very touristy area. It is largely known for its lake though the property is around 10 minutes from the lake, there is also a very popular skiing and snowboarding resort close, in the winter it gets 4 or 5 feet of snow and people come to snowmobile and enjoy the snow. In the summer people come to boat, fish and enjoy the lake, they come to camp, to hunt and to enjoy nature. The property is really nice and secluded, my family member has cleared the property of trees for the most part and uses it for water for his property which is close. The property needs a septic tank and electricity ran to it which he claims is not that difficult to do and he could help with. He wants $35,000 for the property which is completely undervalued and CHEAP for this area. He has spent the last fifteen years building this touristy area up, he has built a lot of the houses in the area and businesses, he is very successful. The property has both a residential and commercial zone meaning I can build either.

My plan is to take the 1.5 acres and build two cabins on it. Each will be around 850 square feet and will have 2 bedrooms and 2 bathrooms. Each cabin will have a loft space also. One of the bedrooms will have a queen bed. The other bedroom will have two twin beds. The loft space will have two bunk beds. In total each cabin will sleep eight people. My family member has told me that he can have these cabins built for around $80,000 each so $160,000 for the two cabins plus $35,000 for the land comes to $195,000. Then he seems to think septic and electricity infrastructure will cost another $6000 to $6,500 so lets say the total comes to $201,500.

The going rate for a cabin like this in the area on a nightly rate is between $150 and $180 per night, more if I increased the square footage. Property taxes are very low. Good idea?