Suggestions for land/construction deal?

[Joehn B.]

Hi,

A friend has a very old, paid off derelict home on a large lot in a class A area.   I want to buy the property on terms and demo, build a new house.

I want to structure an owner finance deal with him where I either pay him interest only on the lot or no payments for 18 months (or until the new house completes and sells whichever is earlier). 

How would you structure this?

Also, once on title, what are my construction loan options?

Thanks!