One other point: I showed my agent proof of funds so that everyone knew I was not trying to overleverage the deal.
I've used CTX mortage as they are builders who understand the process. Does he want to put ANY money down? For years it was 30% down for a lot and it was understood the seller would carry back for 3-5 years, Interest only, etc. Or we did an installment sale with a 1/3 down first year, 1/3 next, 1/3 after that which gave them "installment sale" reporting. However, nowadays the Seller may want to exchange into another investment vehicle. The seller can always "sell-off" the note for a discount once it is "seasoned". But I really think you can get a mortage company to put the whole seller cash out loan and take-out loan for the new construction in a very attractive package.
If this is a spec builder then it gets a bit more tricky as he might be trying to get the Seller to subordinate to the construction loan and I don't think I'd be advising a Seller in this market to want to do that!!
Are you going to Family Reunion?
Typically with these types of carry deals one needs to suck up to the seller basically. I don't know if you had done any numbers to figure out if or how the whole deal will pan out from a cost stand point for the buyer as well as a returns stand point (if any) for the seller. Run some cost scenrios and have the buyer decide as to which is would be more feasiable and then make the offer based on those numbers and scenerios. The seller will respond if he/she has something in front of them. They will look for "whats in there for them". Once you get their side of the deal, you re-run your numbers then check with your buyer to see if it still worth persuing, if so, go ahead and present it again. The key to these types of deals is accomodating the seller first and foremost then meshing the buyers needs in with theirs and you have a win, win situation.......hope this helps