Need advise on Pre-Construction Home Purchase Safety: Legal & Financial Protection

[Vasant Jadhav]

I'm considering buying a pre-construction home in East Bay, CA. known person from long time, now he becomes a developer. Developer (new to construction) plan to build 5 homes, they have city approvals and permits, with groundwork in-progress and will be ready for foundation/slab work in 2 weeks. They're requesting 20% down payment for my selected lot.

Concerns I have, (I do not know how its works in case project goes south)

Land Payment: Developer paid 70% of land price during the purchase, remaining 30% + interest to seller from profits (seller has priority). Property registered under LLC which is owned by developer, however he mentioned he need to give remaining money and interest to previous seller first - I am not sure this impacts my purchasing scenario.

Key Questions:

1. What specific clauses needed in Purchase Agreement to protect my investment? (escrow/property segregation rights)

2. How to protect against Developer's LLC bankruptcy? even I know him from long time, how to protect my money If I give it to LLC/him.

3. Legal Separation Needs: (for any reason if other houses have a dispute or litigation with developer, is it impacting my constructions as well?) How to legally separate my lot from other properties?

Looking for experienced advice on these specific protections. Thank you!