I've not got any development experience, but even if you bought the place you were looking for, did nothing to it, and hold it for 7 years, you're likely to make the $200K anyway??
I know capital growth isn't linear, but after holding a $850K property for 7 years assuming 5% capital growth (very realistic given the area), the same property will be worth $1.2m, you've got almost $350K in equity there.
This doesn't include the income generation from a tenant Day One; a 3 bedroom in Ringwood could get $400pw in rental returns.
Just my two cents worth.
