He has offered to sell us a vacant lot at a huge discount to help us get started (he paid $10K and is willing to sell it to us for $25K - will be worth $100K+ once water/sewer is run to it).

I'd go there and remove the electric meter, shut off the gas, shut off the water. 

The current tennant has been there for 7 years and he's great,  he does ALL the repairs,  I only pay for the larger materials expenses (like a water heater), but he pays for all the smaller stuff,  faucets,  plumbing,  outlets,  etc.   

New paint, flooring, new kitchen remodel, complete basement refinish, complete landscaping refinish,structural reinforced and water mitigation added What was the outcome?

I've replaced so many of these over the years & it can be an easy job if the pipe runs are accessible or a nightmare if you need to go through walls.The last one was a MF that had a mixture of Galv & 3/8 water Cu lines connected without any catalytic protection so the joints all had severe galvanic corrosion & were leaking.

Also, does anyone know the ballpark amount that needs to be spent to develop 7.5 acres with infrastructure, plat the land, county water/septic hook ups, paved road etc. 

If you put mobile homes on a lot, you need to have water, electricity and septic (or sewer connection). 

I'm looking for your typical double wide or smaller house on a little plot of land with hopefully city water and no land or HOA fees.

I am fairly confident I can rent this out on AirBnb for around $120/night on weekends during warm months and $80/night midweek and get a fairly decent income from it - I'd estimate conservatively being able to net $1,500/month on average from May - September and $800/month October through April (would love to find monthly tenants, but acknowledge that won't be at 100% capacity during off months).I put in an offer for $40k, which is what I feel like the house is worth in its condition and location - there are a lot of houses in similar condition but with more square footage (this guy is just 650 sq ft) that have sold in the $20k-60k range in the last year.

A water line burst over the winter while we were away and we are stuck with a bill of 3500.