Hi Newpoint,
Is your friend the person selling you the land or are they somehow involved?
Why Portland? .....where's it heading, what's the market doing now and what has it done? Is the population growing.....check out
www.abs.gov.au for statistics from 2006 Census.
What does BIG BLOCK mean? What's the size? I wouldn't consider a two townhouse site to be a big block.
If you haven't developed before, it may be unwise to be doing it from a distance for your first one. You can get a project manager (perhaps from Warnambool) but that would eat into your feasibility. Also building costs may be more expensive than in metro Melb.
Do you intend building to hold?.....If so what's the rent you are likely to receive in Portland?
If you're developing to sell. what are recent comprabale sales there?
As for the builder, a decent contract should stipulate the conditions of timely completion and fixed price. As for council approval, ring their town planning department and find out their thoughts on development and what site size is generally required.
This list is by no means exhaustive, however they are questions you need to ask of yourself before you entertain this deal any further. Always do your own research.
Hope this helps you in your due diligence process.