Hi @Kishor Y.!
This is a subject that is close to my heart! I cut my teeth on finding land for my builder clients in the Emerald City.
1) As far as your budget of $400k to $500k, I cannot speak into...That is all about who you have doing the building and running the project. There might be someone out there that can do it for that price in that neighborhood in King County. My initial thoughts.... and that is all they are.... not to be taken as fact... That it would be a challenge to build in that neighborhood for that budget.
2) As to the red flags, I can speak to with some experience. If you find a flat lot, that is great, but make sure you do not have any wetlands, or a creek, or any other sensitive areas on the lot that could hinder your obtaining a building permit. Also, even if the lot is flat as a pancake.... you need to make sure the soil is good for building upon. By that, I mean, make sure there is no fill dirt... if there is, you will more than likely be required to put "pin piles" in to support the foundation. This can and has stopped many a project, and scuttled plans to build. Fill dirt is too loose to build on and lacks the hard pan need to build a foundation on without the the possibility of damaging the foundation by the weight of the house.
If there is slope on a lot that you are looking to buy, there may be an ECA (Environmentally Critical Area) or slide prone designation tagged onto the property. This will require you to do more expensive soils tests and also cost you in time during a feasibility study. Do you your due diligence.
In the City of Seattle, and I kid you not, there is a tree ordinance.... If there is a special tree on your lot, it can greatly affect your building footprint. If there is a birds nest visible in that tree, that can also put your plans on hold until you get a wildlife professional out there to determine if it will get a "sensitive" tag on the lot, thus making it that more difficult build there... and that is not even counting the arborist that would need to called out to look at the tree... Then again, if there are a group of the same trees.... you catch my drift? Double check that there are no weird ordinances like that which could put the kaibash on your plans to build.
All that to say.... I would recommend finding a land use consultant to help you do your feasibility study.
Another thing you might want to consider: if you have a relationship with a builder in the area, or can form one, they will sometimes fee-build a property. That would need to be negotiated, but it happens. A builder will do the feas on the property, get the permitting, and do the build for a guaranteed amount of profit for them baked into the deal. Again, do your due diligence on this as well. They may want you to buy the lot first and do the permitting before they do any building, so double check all this with who you might work with.
I hope this was helpful. By all means, don't hesitate with any other questions. I will try to answer to the best of my limited ability. Cheers!
