Now his next step is close the land asap and get started on the actual construction work.

Perhaps you don't exercise the option until after they pass away, at which time there may be a step up in basis.

@Josiah Collins The first step to take is to talk to a several hard money lenders, learn their rates and get pre-approved.

I'd certainly go to a gathering/happy hour; the local REIA isn't always on a topic I would pursue so a meeting outside of that would be great. 

I am not an expert on this by any means.. there is a fellow in Indy his name escapes me  I think its Ken Myer or something like that.. who is big in this business and he might even have a educational arm to his business.. its probably worth the money to pay to have up front training before you step into this big of investment.I personally see this as buying a on going business not really the rental business.my experience with my unit .. is it was only 44 units.. but really nice ones it was not big enough for on site management.. so if I did this again It would have to be big enough to have on site management to show the units and keep people from sleeping in them and hauling all sorts of garbage into them like a hoarder.Don't do as I say.. but when people didn't pay and went dark ..

Or if I should even pursue a short sale w/o a real estate agent.

Your next step, aside from intensive financing and investing research/study, is to now take the money you were using to pay down your bad debt and put it towards saving up cash to invest in a DB and for reserves once you buy your first investment property.Difficult to go far in this business without either cash or a cash partner.

What legal steps do I have to take to form a partnership in terms of financing.

Finally making steps towards my first deal.

I make about 1k a month profit off the homes and am wondering what my next step should be.