Additionally, if by the time you find out you are being sued, aren't all your other land trusts compromised already? 

What should i do as this person is not willing to show me all of the financial documents, unwilling to compromise and I am unwilling to fund this deal any more.

Their loan on the property has been significantly compromised.....

Absolutely no experience in construction but I'm assuming an obvious sag like that might mean a compromise in the support beams which would equal a costly fix.

If there is a valid reason, maybe you could get a compromise from him to activate the electric once every 6 months to avoid the issue brought up by @Jerry W. 

I think you do a great disservice to your private lender if they don't have a mortgage AND sufficient equity (say 30% of FMV) above the combined loan-to-value of the first and second to protect their position.I'm not an attorney but I strongly suspect that the hard money lender holding a deed has the potential to compromise to a degree the private lender and, if I were the private lender, I'd sure be getting competent legal advice relative to law and precedent in the state wherein the property is located.

The key for me is to build at below average costs per sqft without compromising quality.

I can confidently say most of my weekend enjoyment is compromised by after hour calls with every possible problem that exists to mankind AND I could write a pretty dicey book... 

This current unit appraised for same for last potential buyer and seller wouldn’t compromise. 

Imagine what would be your ultimate goal, how much you’re willing to compromise and then try to live it in your head.