consider the opportunity cost of doing this#1) sell house for cash or to a buyer with their own financing from a bank, etc and you get 315K at time zero, you invest that at historic SP500 8.4% return over last 220 yrs and it grows to $3,541,514.46#2) do owner financing and you get 100k up front that invested at 8.4% grows to $1,250,000, plus you get your payments at $1400 x 360 months or $502k, invested grows to $3,265,000 total including the 1.25 mil aboveso you come out 300k better not doing it and you don't have to service the loan and all the other risksremember banks don't even carry mortgage notes after origination, they dump them onto the US taxpayer via illegal-unconstitutional havens like Fannie/Freddie/HUD, and for last 15 yrs the FED has bought every MBS in the country, which frees up the Banks capital to do it again and make the real money on churning the points and feesplus will next 30 yrs have higher inflation than last 30 yrs?

Taking out $500K of tax free money (sounds like Section 121 (married)) through the sale of the property is great if you're trying to scale your portfolio.

Will a bank see the same value that I do and be willing l do a DSCR loan based on LTR and STR on the same property?

Same thing with your HELOC, if it's a $0 payment, it's a $0 impact.Not discouraging the purchase by any means, but food for thought: "There's no free lunch" if you're getting a below market rate from the builder that's getting paid for in the purchase price.

Has anyone recently used a lender that lends based on the rental income of a property?

No one here is give you can accurate answer based on what you wrote.

Of course site specific details could change my take above, but based on what you shared you need to buy a SFR in the two allowable areas above in order to obtain a STR permit. 

Feel free to reach out if you have any questions.

I would like to know the following based on your knowledge of the area.1.

So he will get some of the profit tax free.