This situation has unexpectedly complicated matters, and I am unsure of the best course of action moving forward.One suggestion I've received is to secure construction financing from an alternative source and forego the construction funds from the hard money lender.

This seems like a complicated plan for your first deal.  

C-corp is too complicated and cumbersome in my opinion.)Open the LLC, get your EIN number, and then open your checking account and first credit card with one bank. 

A lender is not going to be eager to loan on a property to an individual who isn't on deed (one of the complications of sub 2 dealing with title insurance not IRS). 

Plus we have a complicated city with zoning and the building departments with inspections and violations.  

Yes being in Germany has its own complications (laws,finances) but the big advantage is i know the area and i know how the military thinks on what they want (single and family). 

No incorporation or anything that complicated.

Sounds complicated, but I see there are people making it work.

If it gets too complicated self managing I will sell and look for another area that will work better for that. 

Complication: the property was acquired through a 1031.