From what you briefly wrote I could probably tell you that the zoning may be a commercial general zone which would require a zone change or a conditional use permit (both of them are lengthy processes). 

@Kelly ConradMan that's a lengthy qualification.

Getting back into business building houses is a welcome improvement over searching for land to buy, arranging financing, and dealing with community concerns about our lengthy rezoning application that is now complete.

Would a lender be flexible with the lengthy, uncertain land purchasing process?

If you wait 6 months then value is based on lower of market or acquisition cost After 12 months it's based market value only.The caveat is the ltv's get lower as you hit #5-10 financed properties and after 5-10 is hit you will not be able to cash out unless if you bought it with cash (not financing) in under 6 months proceeding the acquisition date.There are ways to cash out after you hit  5-10 using conventional and get your money back but it's a bit lengthy for this response and requires strategic planning.Second option is portfolio financing, local lenders, generally with the title of "commercial loan officer," or vp of business financing etc they do not carry the title of residential loan officer 9 out 10 times.

After stumbling over the questions in the paperwork for two days I called the loan officer and he cleared up a couple things for me: No pre-qual letter will be provided up frontA subject property is needed with all the figures filled in for underwriting to analyze the deal (community bank - committee meets once a month) And there is a lengthy lead time (30-60 days) for review before funds will be distributed My reply to these conditions were:How do I obtain the rent roll and other financials with no pre-qual or proof of financingHow can I prove/show the owner I am serious without it The loan officer mentioned, I would have to be convincing and/or suggest a lease/buy option with the seller.

So if I use a family member for the 2nd lien (1st lien is family member) would that not be arm's length? I

I did a lengthy post on expenses a bit ago that provides some insight.Bottom line:  If you're a straight cash-flow investor, VRs aren't likely a magic investment. 

Albeit rather lengthy and comprehensive I think you may find this information useful if you really do want a thorough understanding of the difference between the two.The Difference Between A "HUD MANUFACTURED HOME"and A "MODULAR HOME"Part 4 For those who may have missed Parts 1-3 please take afew moments to review should you have any interest in"FACTORY BUILT HOUSING".In Part 1 we discussed the difference between an "RV", "Park Model" and a "HUD Manufactured Home".

Luckily we haven't had to evict anyone yet, but I know it can be a very lengthy process if the tenant refuses to go.