I would just say no, counter with the terms you want (maybe even demand they sign a contract you draw up) and see where they go with it.

And the demand has trickled down and pushed our city's prices up as well. 

The reason he won't get a traditional hard money loan is because "his 1st mortgage that he's ad since 1996 is for $141K and at 2.9% and he doesn't want to sign it away to a hard money lender who will demand to be named on the first mortgage"He will give me a 2nd loan on his property in Austin where the LTV is about 61% and pay a few points higher than a traditional hard money loan.

You also have to factor the supply and demand portion. 

Here are the reasons why investing in Orange County makes sense: One of the lowest unemployment rates in the nation, A broad based economy, High demand for housing, Perfect year round weather.High median incomesWell educated workforceAbundant opportunities for higher educationFirst class medical facilitiesAmusement parks, recreational opportunities, sports teams and so much more!

How is demand? 

You need to also understand the demand of the market.  

I seem to have much more demand in the summer months, and Im not having much response for a 2/2 condo that I am currently leasing for a Nov. 1 move in.  

If a client has a renovated home near downtown Raleigh, that demands a different tenant than an unrenovated home from the 1960s a block over.

Supply and demand is what it is about.If suburban go out 3 miles.What is WALKABILITY and population levels  for the area?