Form up the foundationDig exterior foundation beams Complete the plumbing rough Termite treatmentNext week we will add steel, seal the foundation in plastic and hopefully pour assuming we can find a time slot with our concrete provider.We are working off our first draw which is only 1/5th of the land purchase price so our loan to equity ratio is a tiny 20%.

This is a bigger issue for rehab flips than incoming producing CRE.

If you invested all of your assets in income producing investments like rentals and notes today, would the yield fund retirement? 

This will help you control your own destiny (retire when you want to, not when someone else kicks you out the door).As an asset class, equities tend to produce higher long-term annualized returns than real estate.

It seems to me that $2k. is a fair upfront invest, but not without a money back "guarantee" if one "jumps through the hoops," and does the legwork that should in turn produce the RESULTS.

MOst likely if you seller finance, the end buyer typically puts a minimal amount of downpayment which is seldom enough to pay off your Hard money lender.Also, the high interest rates are not suitable for holding for long term because the net income produced by the property has to be extremely high to cover the debt & operating expenses.The proposed exit of selling your note will be challenging as well because as a note buyer I will tell you, note buyers want adequate equity cushion to protect their investment, and they want a decent yield on their money as well.  

This will just end in despair, madness, and agony.If you explore all of the above topics with your developer, it should produce plenty of very constructive conversations that should give you a good idea of whether or not to move forward.

I highly doubt a property like this will produce reliable cash flow and consistently carry your debt.

You buy raw materials (junky houses, building materials), put in labor and produce a salable product. 

They are nice romantic stories and certainly produce quality returns.