I track the principal as a Liability account in Xero, and whenever I add it to a report, it always shows the current balance, rather than the change over the chosen time period (like with expense accounts).  

If she's willing, which it sounds like she is, your mother-in=law can get the line of credit with her property in her name and then you can just use the line. 

We have a great deal of resources, especially in Georgia, Texas, and Florida when it comes to things like construction, development, etc.

It would be great to have something like that.  

Someone like him is a good resource for questions like this as he guides you through the transaction.

I was wondering if anyone has any experience developing or owning something like this.

I have a BS in project management, and I can say I have never seen anything like this in the construction field.  

Quote from @Stuart Udis: Good luck, wholesalers are the least likely to follow do not call list/related legislation.

Is it doable - yes but you will need to go to a lender who probably uses their own funds vs. an instituational lender as they will not like 2nd position nor the low amount.

It will be almost like new after we finish.