Instead of a traditional down payment, I would give them some money (maybe just to bring the loan back to even).The upside if taken over the loan at the current balance, with some rehab and hopefully getting the front lot back would be a nice ROI. 

The LLC is irrelevant unless you are paying cash or getting a DSCR loan.

Look for local PMLs who specialize in rural areas or residential properties.Credit Unions:Some credit unions offer flexible terms on small loans, especially if you have a solid relationship with them.

@Craig Holland Land is often sold with owner financing, in part because buyers have a hard time financing it, and in part because buyers often only need a short time before they can build on the land and refinance out of the seller loan. 

The terms for a 2nd position loan on a rental is 6%, 25 year term,  and 2 points origination fee.  

If he has a $5MM loan in place, what was that used for / is it coming due/ was it short term/ etc.?

@Jon Ankenbauer you won't be able to keep the land separate from any future construction loan.

@Ashish Acharya I have found that I get better terms for personal loans. 

I was considering having a lawyer draw up a baseline loan doc and make tweaks to it on a per loan basis.

You don’t have to pay $20k+ to learn to broker loans.