Or would the buyer builder buy it without the building permit and gamble obtaining it at a later date once they have a variance?

Thats a big gamble to take when each container costs $7k each.

If not it sounds like you gambling your investment may be better to stay in the stock market?

As @Omar Merced said, you might have some luck buying in an area that's in the path of progress but that's big gamble in my opinion.

There are already 4-5 "buy houses" bandit signs around every corner and our craigslist is just spammed with everyone's buy houses/rei ads (not properties).

Appreciation is gambling, recall 2007.  

I'm willing to gamble a loan on a house with little to no skin at the game at first.

I'm fairly risk averse, but at the same time I love to take a gamble on real estate some times.  

It's really starting to get scary now when many markets that use to cash flow positive no longer do, and you are almost gambling on appreciation.

However I don't see anyway around it there is absolutely no way to get above them in the SERPS and if you were to try it would cost you millions a year and it would be a gamble not a sure thing.