There are still corner cases that won't be covered, such as environmental.

Traditionally, these would be a door and a window.Minimum ceiling height: At least half of the bedroom ceiling has to be at least 7 feet tall.Minimum window size: The window opening must be a minimum size, usually 5.7 square feet.A heating and cooling element: A heater (space heaters won't qualify) as well as a way to cool it down, whether that's by opening a window or AC.

The 2 elements of why this strategy is better is that if we compare both loans at a 75% LTV the rate on this method would be lower. 

You need to have enough money, probably in the $100-150k, amount to put the property under contract, and do the feasibility study on the property, Phase 1 Environmental, Property Drawings for roads, water sewer, and utilities, and have a completed budget so you know what your costs are.At that point you can go out and attract investors, I don't thing that developing raw land is necessarily cheaper than buying discounted finished lots. 

The key element that I personally found to work well is to work with someone who has successfully invested already. 

In that configuration there is some key elements, namely access, utilities and layout.  

Just realize that it requires many specific conditions to be met, and has much greater risk elements that you need to be prepared to potentially go wrong.

The other 75% of the skills required to be a good developer will have to be learned elsewhere (a good mentor is the best way).These include everything from Zoning/Subdivision/Land Issues to Environmental Issues to Permitting Nuances to Design Issues, plus all the differences in financial analysis.

To pick just one of those items and call it "investing" is not understanding the element of time/energy coefficient.

He will tell you, INTER ALIA, that you want inspection, financing, attorney review, title review, insurance, environmental, and survey review.Second, get a GOOD home inspector lined up.Third, get your banker lined up.THEN you can start looking.Also, keep in mind that backing out of a contract must relate to the contingency being used, and can only be triggered AFTER a good faith effort comply with/fulfill the contingency.