She did not qualify for a mortgage loan to build on her own so he became a coborrower which meant he had to be on the title. 

My brother and I would like to be co-owners to the new property but our contribution to the purchase of the new home is by way of investment loan, so let's say my parent's home sells for 500k and they want to go in on a $1M piece of property.

After you close - use a loan servicer to collect payments.

Check in with @Joseph Chiofalo for STR loan options.

Most have loans at half of today’s rates.  

The Programs includes or covers:- Up to $2.5B in second loan purchases- A maximum programs duration of 18 months- A maximum loan amount of $78,277- A minimum seasoning requirement on the first mortgage of 24 months- Only for Primary ResidencesThe effect of a guaranteed government backed second mortgage for homeowners would be significant and likely put eligible second mortgage terms in line with below market FHA and guaranteed first position mortgage rates. 

Assuming the credit is healthy you may be able to go up to 85% loan to value. 

I was looking to payoff the underlying loan of $156K, and add construction hold-back of $250K. 

Maybe you can ask a family member for a loan.

Im wondering details how commercial loans work.