Building contract between friends

Your simple question will clarifies 100 doubts. It is not so easy to know all the doubts in a  single para. It is better to consult an experienced person in the construction field. But any how I am giving you some points.

(1)  You are not eligible for Project loan from the Bank. You can get only mortgaged loan on the proposed property. 

(2) You should verify whether  the said property is a legally valid property or not 

(3) If so go for building permission.

(4) Then marketing. Execution of  Sale Agreements/Sale Deeds etc.,

(5) And so many aspects, you have to follow. 

This is called development of the property. Normally for development there will be owner and builder.  Your friend will be the owner and you will be the Builder.  Your friend will not have to take any risk. He will take his 40% built up area (which includes land area) and the Builder is entitled to take 60% of the built up area.  The whole responsibility of construction, electricity, water, drainage, building permission will be of the builder.  This is the procedure generally followed in cities.  But you can alter the terms and conditions of the development agreement as per your convenience and accordingly the rate of sharing the built up area will change.  

Thanks for explaining Sir. I want one more advice as how the bank will provide loan to me in this case as the land is in the name of my friend.