No one else will do as good as job as you will because their interests are unfortunately not aligned with yours as landlord.

In theory, my thought was that this structure aligns our interests and motivates the GC to keep costs down while also making the place quality enough to sell. 

I had a look at your profile, and I think our interests are aligned.  

There is such thing as over leveraging, but if all of the stars align in  your favor, you will have out smarted a multi-billion dollar industry.

These are especially aligned with what you want because the houses are frequently hoarder houses or just tear downs, very old and dated, lots of RE agents don't even want to list them to avoid being the agent in their office that always lists the "dumps". 

Do they align?

Is it customary in owner financing to align with going bank rates?  

I would plan for a year of hard work to really start to see the stars align.

I would also have a frank discussion with anyone that I was going to do business and let them know what my expectations were and make sure they align with theirs.

If you go through the same bank you basically align the refinance with the balloon payment.