Adding the current mortgage and utilities would be roughly $1,350 resulting in a profit of $650/mo.

Utilize financial analysis and market research to make informed investment decisions.

Would it be wise to buy the land with cash we have or utilize as down payment to avoid PMI?

if you are going to do things like include utilities, or have an off street parking spot, other amenities etc, there's no reason in my mind you couldn't "charge a premium" for a premium unit/service. 

My vote is if you are going to continue to buy, you need to utilize leverage.

To estimate expenses, consider setting aside a percentage for management fees, plus costs for cleaning and utilities.

It is what is left after snow removal, cutting the grass, utilities, tenant issues, parking lot issues, property taxes, mortgage payment, etc. that make a difference.

And have you thought about building back utilities?

I have also utilized owner financing for longer periods of time, including personal residence and 2 barrier island houses on the coast of Florida.  

Quote from @Jacob Sherman: you can utilize no income no doc construction loans . fund 50% of the land 100% of construction upto 65% ARV .