Since water seeps quickly into the test holes, you can assume the soil is porous. Collapsing soils are strong indicators of poor plasticity and sandy soils. That's a problem. But, if the water stays in the hole, you probably have a high water table. If that's the case, you may have to build an excavated-style pond rather than a reservoir with a dam.
I think you should bring in a local soils expert to analyze what you have. You might be able too sell some sand. You may not have good soils, but you may still have an opportunity, too.
Since you don't have long experience dealing with soils, bring in an expert and pay a consulting fee...or, check with the NRCS and see what they think.
It'll be worth the time and effort.
