He has now asked me to pay the contractors for the first stage, about 24 lots, for dirtwork, sewage, roads, curbs, electric in exchange for some of the lots.

We have access to personal capital through equity and recently offered on a boutique motel that we were going to manage initially, but couldn't come to agreement with the sellers. 

I had 125% inputted for Repairs and maintenance, 75% for Vacancy and 125% for Capital Expenditures 😅 just switched them all to regular percentages and it's now showing negative $1,030 cash flow with $3,530/mo expenses.

I am gathering some investor friends now to go in, but was hoping to do this small development without giving up equity. 

@Rehaan KhanPlenty of very good real estate attorneys out there and especially good ones who will tell you you all the risk involved - which is why many shy away from many of the “creative” financing deals going on right now which are just unqualified buyers finding ways to buy a home and those attorneys do not want to be part of the lawsuits later on.

DSCR rates are currently in the 7.5% - 9.5% range right now.

Now you have to cover that mortgage plus your new house one.  

Now personally I would never have taken a client there without a written agreement between you and me, If you are not paying a buyers agents commission that's fine and your choice.

There will be a time in the future if you do move forward with this, 1 month, 1 year, 10 years from now, where one person is going to be upset because they are doing something that's "not their job".

HI - not sure if linking is allowed here but I just put out a piece on advice on this exact topic (https://www.biggerpockets.com/forums/517/topics/1196250-tip-...) - you should be OK but it would behoove you greatly to get some sort of documentation like a BPO (Broker Price Opinion) of the value now for use later in the refi!