Quote from @Lolo Druff: Just like turn signals, you should always trust, but verify that the seller is telling the truth.Your offer to purchase should include a requirement that the Seller provide all documentation and agree to sign an estoppel certificate (also called an estoppel form or agreement).

Re-read your contracts, document your correspondence (and attempts) with your builder and demand documentation to match up any payments/draws with what's actually been competed on your build.

What documentation will you require at closing?

If you or him are just giving each other money with no legal documents in place so you can scoot buy and get in, then good luck to you both.

Proper documentation and consistent reporting are crucial to ensure compliance with IRS requirements.

2.WHAT OTHER DOCUMENTS SHOULD I ASK THE HOMEOWNER TO SIGN?

Document all of what you do if you are going to get it done for them, and/or if you cut them a check then make sure it is in writing that it was all done and they cannot come back to you at a later date asking for more money/mitigation.  

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?

Potential ChallengesPrepayment Penalties: Check your FHA loan terms for any prepayment penalties or fees for refinancing before a year.Appraisal Risks: Ensure your property’s renovations are well-documented to support the higher valuation needed to pull equity.Lender Requirements: Commercial lenders may scrutinize your LLC’s financials and operational track record.

So creating all these funky financials is great, but if you are using those in a presentation that information should be in the PPM or an official document as if someone is making a decision based on that - it can come back to bite them.