So, yes, I would buy a land locked parcel after due diligence, if it looked like it wasn't worth the time and unknown, but estimated costs, I'd move to the next trick.You hit on it, get a contract and then approach every adjacent owner, one of them may very well buy it.....question is, for what use?

There's less unknowns with new development than flipping, which the more conservative lenders appreciate.

Plus you manage locally, and you know the area well, so minimizing your risks of unknowns (which are much higher in areas and tenant base you’re not familiar with.) 

If you go after what appears to be a good deal with an unknown, it can blow up in your face leaving you out in the cold when things go south.

I realize that the deposit/earnest money is only if offer is accepted, but if the contract does not pan out and Fannie Mae has reneged on the contract for whatever reason (unknown issues with the title or liens from unpaid utilities etc.) then I want to make sure I receive my money back.

The unknown factors are what all needs to be done to the house.  

That said - my philosophy is that banks make a lot more profit in 30-yr fixed loans as they take the premium for the unknown in the future.  

Somebody wanting to sue for you backing out of a bad deal or accusing you of selling them a property with defects like unknown termite damage).

But how many first time buyers on BP mention they have 6 month reserves (pay mortgage, expenses, property tax, insurance, etc.) just in case the unknown happens?

With my brother we split assets and possible unknown liabilities.