Start with what the extensions do to the number, because that's arithmetic you can do before you ask anyone anything. If the deal returns a 1.55x multiple, that's roughly 19% annualized over 30 months and roughly 13% over 42 months. Same dollars, same outcome, both extensions used. So a sponsor with sole discretion over 12 months of extension has discretion over about six points of your IRR without any adverse event occurring. Price the deal at the outer date and see whether you still want it.
Then the exit itself. Entitled paper sells to a builder at a price set by the builder's lot math at the time of purchase, which depends on their absorption assumptions and their cost of capital. Ask whether there's a letter of intent, an option, or a takedown agreement already in hand, and if so, whether the price is fixed or formula-based. Speculative entitlement with no buyer identified is a different investment from entitlement with a builder option attached, and both get marketed the same way.
Carry is the third thing. All cash and no debt sounds clean, and something still pays property taxes, consultants, engineering, and legal work for 30 or 42 months. Find out whether that's funded from an upfront reserve inside the raise, and what happens when the reserve runs dry. If the answer is a capital call, read the dilution formula, because declining a call on a no-cash-flow deal at month 28 is the worst position in this structure.
Entitlement risk is also political and procedural, and how it can be challenged after approval, including referendum or appeal windows, varies by state and municipality. Have a land use attorney in that jurisdiction tell you what the realistic path and timeline look like before you rely on the sponsor's schedule.
