Pros include securing the desired property and strategic planning, while cons involve higher costs, financing challenges, and complexity.

Toward the end before closing, they gave bunch of excuses like security breach in their company, don't like the file and the property.

While both involve finding and properly securing a site and bringing it to full entitlement, the ground-up process includes the land piece but gets way more involved and complex to execute.The full "Monty" for ground-up development needs to include financial literacy, an explanation of metrics, and how they work.

I think it would be financial suicide to give up a 500k a year job that you know how to do and is secure to launch into thinking your going to replace it with rental income.. unless your sitting on 5 mil plus in  cash with no debt.

Also, securing financing is no different than site built unless you're dealing with  someone that has no experience originating loans. 

I've wondered that myself and thought: If an investor was looking for birddogs why would the birddog have to pay the investor money before they began securing leads for the investor, that the investor would then in turn give the birddog an investor's cut on the profit end???

You are not responsible for his failure to secure his personal property.

.- Financing: Starting with cash but hoping to secure loans for future investments.

With your point, it seems like living security of 'where's next' for them will be the biggest obstacle for the seller to overcome.

If you google the Wyoming address it is an attorney's address who specializes in setting these companies up and is a mail forwarding service not a "real" office with staff, owners etc.In the one investment document I read, your investment would be in a construction company with no assets and secured only by a UCC filing.