This may be an overly ambitious strategy considering that I am inexperienced in both DIY and sales contracts, but in theory it seems like a very efficient option.

As is price point.. this will give you a better long term outcome.if you buy way under median your getting into renter dominated neighborhoods and schools for sure will be bottom ranked.. instead of going East have you considered Vegas.. lowest prop tax's basically in the country. no big weather issues  desert landscape super simple to take care of.. and Stucco homes with tile roofs no big thunder and wind storms to ruin roofs etc etc.. you can buy nice rental house there is a solid B location for about 300k. just worth checking out if you never have..

The way we look at it however is this sort of situation would be OK - but its a one time referral fee - any sort of arrangement with a long-term referral fee / borrower protection is reserved for true professional mortgage brokers - who like @Chris Seveney mentioned, would be doing more legwork on the deal vs. a simple and clean referral handoffvia CFPB on referral fees for business-purpose hard money loans:§ 1024.5 Coverage of RESPA.THIS VERSION IS THE CURRENT REGULATIONView all versions of this regulationSearch this regulationRegulation X(a) Applicability.

They only have a simple promissory note that they likely now have to file a lawsuit to win a judgement, with again no promise of repayment. 

If you have natural gas to that spot for a tanked unit, swapping to a tankless is cake.Insulate the garage door if that isn't done.If you are local and handy, you can do a DIY mini split in there for under $1000.

They are all stabilized investments with paying tenants.Once again, the program is rather simple. 

It was built in '59 and the previous owner did mainly DIY fixes for everything.

perhaps a simple conversation like that could solve things?

I would love to see how to get started .from purchasing the land, permits,  and simple question for a newbe like what's the min acres you need to build...

It is better to say something like "I can pay you over time and you will earn ineterest until I pay it off"  As simple as the concept is, it can be tough to explain to a seller.