I think that it will be challenging to find PMLs willing to lend an amount above the purchase price of the home especially if there is not a very strong track record of performance or a strong pre-existing relationship. 

I also can't fundraise publicly, so this is preexisting relationships...

Do you have a pre existing relationship with the lender?

What are your pre-existing build options? 

Your offering is made only to investors with whom you have a pre existing relationship; you can have up to 35 “sophisticated” investors and an unlimited number of accredited investors.

I am looking to raise money from friends & family or a mixture with people I have pre-existing relationships with such as co-workers or people I know with money or money in they 401k. 

If I have to sell, they'll pay off the pre-existing mortgage no problem.

Even still, it's very likely they are biased to the seller since that's a pre-existing relationship. 

Title insurance doe Not cover any kind of preexisting lien.

Pro-Tip: If you have someone in your family with pre-existing conditions, Obamacare protects individual plans from pre-existing conditions.