In light of that did the developers wind up getting a pretty decent deal out of this after they took a big risk on a property with crazy restrictive zoning and no clear path forward prior to purchase?

Let's assume the financials in the package are good for a moment (they probably are not) AND that you either do not or do achieve the broker's pro forma:If you purchase this asset, achieve ONLY the 'current' NOI, grow NOI 2% per year, and exit at a 5% cap at the end of Year 6, you will have a 4.8% unlevered IRR. 

Quote from @Brandon Le: Your first purchase could/should be a house hack.

The only additional thing that needs to happen is make sure appraiser makes note of why the value increase in as is vs previous purchase price.

Keep in mind, it would be in your best interest to go for as high as 4 units on each purchase to maximize your door count. 

Is it better to have a willing seller and buyer before sending the initial purchase/sale agreement?

Quote from @Roger D Jones: Quote from @Fred Scott: @Roger D Jones:  Any insights on why the North Carolina purchase in Fund IV makes you nervous?

This person did not raise any money, they invested around $600,000 into the offering and because they were one of the larger investors were considered a Co-GP because it was a new sponsor and they needed this persons $.

You want to look at paragraph 12 of the Texas purchase contract, called the 'One to Four Family Residential Contract'.

@Chase AlexanderRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?