Was thinking low down payment owner carry purchase of the 50% interest just to lock it up.

I used Carrie Johnston from Approved Mortgage here in Lafayette.

One company owns everything and does nothing (this is your SLLC a/k/a “asset holding company”) and a completely separate company handles all of your operations (this is a traditional LLC a/k/a “operating company”) For the operating company which serves as your face to the world and through which you do all your business, you establish a Traditional LLC to carry out the operations of your investments.

Assuming you don’t plan to owner occupy the property, buying vacant property as an investor carries risk and is quite speculative.

This was an easy decision for me as I wanted to carry on the legacy of my family in this neighborhood, and with such a short supply of deals in our market currently, it was a no-brainer for me to buy the home.

However for some reason the letter from the lender carried a lot of weight to the selling agent. 

Conventional financing through a local lender plus a seller carry back.

As @Clifford Paul had mentioned try small credit unions, they keep their loans in-house so they can carry their own underwriting criteria.

But should I carry the burden of a huge house payment for a house I don’t use?  

Why don't you try and bow out, you'll lose your deposit but at least won't have the stress of carrying 2 deals.