That being said, what do you plan on doing about your vacation rental(s) when your permit is phased out?

Ground up development takes time, expertise and deep pockets. 

Once a permit is issued, you can start construction as long as the ground is not frozen.

It doesn't sound like they have grounds to back out and would be breeching the contract if so. 

Common Area: set ground rules for living room, patio, parking... be very clear about guests (stayovers), guest consistency before they become a tenant, and pets.

Unfortunately during my due diligence phase, I learned the maximum square footage allowed on this lot is 2400 sqft (including the garage). 7900 square foot lot, 30% max or 2400 sqft, whichever is greater.

Overall I think its a great place to invest in right now and is still growing at a rate that you could get in at the ground level. 

I break down each phase of the process and list all the details required to check off the tasks required to get a buyer from the interested stage to the closing table. 

The home is grounded to plumbing.

Soak it all in while you're trying to get off the ground.