The county approved my plat in two phases and the carrying cost math changed completely between them

The partial-release ratio is the number that will make or break the back four, and you have identified the right pressure point. The piece worth adding is that phased plat approval often means the county recorded two separate instruments, which can affect how a title company handles lot-by-lot closings on the second group, since some underwriters want a new title search against the phase-two plat rather than treating it as a continuation of the original, and that adds both time and cost to each of those four closings.

The other assumption worth testing is your road-work allocation. If the $120k in engineering and road work was sized to serve all nine lots but the access improvements had to be substantially complete before phase-one approval, then the phase-two lots are already carrying sunk infrastructure cost with none of the offsetting early revenue, which compounds the interest-loading problem you described.

What does your agreement say about who holds the seller relationship on the back four if a partner wants to exit after the phase-one sales close and the initial equity is recovered?

The phased approval is the deal you have, so the question is whether the back four can still carry the interest load that front-loaded sales did not retire.

The assumption doing the most work in your numbers is the lot value allocation. If the $660k basis was spread pro rata across nine lots, each back lot carries roughly $73k of allocated cost before a dollar of interest. If the partial-release schedule required 120% paydown per lot on the front five, you paid out around $570k in debt paydown against $475k in proceeds, meaning you went net cash negative on the first phase and the remaining loan balance is larger than a ratable split would suggest. The back four are now carrying whatever remains of that balance plus six additional months of interest the original pro forma did not model.

The risk you did not mention is lot-level margin compression. If the back four clear in month fourteen because of a physical or regulatory issue with that portion of the parcel, the lots themselves may not command the same $95k price point. Buyers for the last lots in a phased project sometimes apply a discount precisely because the project's completion timeline is visible to them. You should stress the exit price on those four, not just the timeline.

On the engineering delay: six months between phase completions is long enough to matter. Whether it was a drainage issue, a road acceptance problem, or a municipal queue, the reason affects whether that delay pattern is repeatable if anything slips further. Your engineer should be able to give you a specific answer there.

Tax treatment on phased lot sales in the same project year versus across tax years is worth confirming with your CPA, since the timing of recognized gains may not follow your cash recovery schedule.

What is the outstanding loan balance right now relative to the appraised value of the remaining four lots?

The sequencing trap you described is real and it catches experienced operators, not just beginners reading this thread. Let me translate the mechanics for anyone newer to the terms.

A partial-release schedule is the lender's rule for how much of your loan gets paid off when you sell one lot. If the rule is 120 percent of the allocated loan amount, and each lot was allocated $60k of loan balance, you have to pay the lender $72k at closing before that lot is released free and clear. If the lot sold for $95k, you net $23k after the paydown, not $95k. The loan shrinks slowly, so the remaining lots keep accumulating interest on a balance that barely moved.

Your point about the back four lots absorbing a disproportionate share of interest is the part most pro formas miss. A spreadsheet that divides total projected interest by twelve months and allocates it evenly looks fine until the phased approval stretches the timeline and concentrates the cost on the lots that clear last.

One thing worth naming: the release ratio is only part of the picture. Some lenders also have a minimum paydown trigger before they will release anything at all. Confirming both the per-lot ratio and any floor threshold before the loan closes matters as much as the ratio itself.

I would also ask your lender whether they will credit partial-release paydowns against a prepayment penalty if the loan has one. That is a clause people often miss until the last closing.

What does your loan agreement say about the release ratio specifically? And is there a floor threshold written in, or just the per-lot percentage?