It was  run down tavern & 4 equally rundown studios apts. 

You want to talk to your CPA first and foremost you don't want to get in a situation were your deemed a dealer and lose your cap gain tax advantages.that said a take down schedule like this is common in the industry.. although CA usually a million dollar property is not a lot.. vis a vi development ground.. and builder developers there usually stroke a check if needed.I suspect though if your going to sell it in phases.the land would be split into 3 phases and you deed out each phase as he pays if off.. but not individual lots that were your CPA can advise you on dealer status.its common though in these scnerios to have accerlated paymentso you have  3 phases  333k each... you sell first phase for  400k.. second phase for 400k last phase for 200k.. this way you get a premium if he fails to buy the rest of the dirtalso in your contract make SURE you demand that all work product engineering soils geo tech that type of stuff is once paid for your property as well.usually in vanilla real estate transaction on the west coast I don't recommend or see the need for a lawyer but in this case I would find a good real estate lawyer tell him these basic terms and things you need then let him prepare the contract.. hope that helps.. and assuming the dirt is in CA.. of course.

It’s really important for me to not fail again on my next real estate investment. 

I'm just lol'ing that someone would build a new casino after watching the Revel fail.

If you fail and lose their money, you lose your reputation and reputation is everything, at least in my book.

About 2 years ago we owned a house but ended up selling due to a failing school district.

They took on additional risk than what a mere investor would take and hence, got compensated (because they could’ve massively failed).

However, I have been unable to close because the seller failed to disclose the litigation between them and a 3rd party abutter who sued him when he started to perform sitework.

And whatever you tell him, it's only as good as your follow through with the consequences if he fails to comply.If don't control your tenants they will most definitely control you.

Hence why industry wide 90% of agents fail & there are a ton of agents running around without any clue on how to transact real estate.A good agent is a successful agent.