To fulfill the contract the Seller needed to pay for the survey, which resulted in a size of 1.8 acres. 

An analysis of the data also shows that the city north of Austin grew 10.6% year-over-year, making it the fastest-growing city of at least 50,000 people. Kyle, south of Austin, ranked No. 2 with a 9% increase to 62,54...

ASSET BASED LENDINGNote: Hard money is defined as average loan size under $2M, average loan hold duration under 2 years, and not a bank. 

$540 is not unreasonable for a home of that size and the items you mention.

Zoning Ordinance ExceptionsSome properties in the target zone don’t meet the minimum lot area or width size requirements under the zoning ordinance, yet houses exist on smaller-sized neighbor lots.How could these properties get approval for development?

The one big caution I would have for investors on the design is don’t make the room size too small.

Get an estimate from a GC to get a good idea of what is required.Market Comparables: Check what similar-sized homes with finished basements or additional bedrooms are appraising for in your area.

Unit size is 1000 SF with an assumed $105 SF cost to build, (Cheap considering there will be no GC costs). 

I informed the seller that because of the overlay, the property may be 2 build eligible in-spite its small lot size.

I informed the seller that because of the overlay, the property may be 2 build eligible in-spite its small lot size.