A few questions on forming an LLC and financing

Hi All,

We are out of state investors, and are working with a local developer in the US, on a new construction deal.

The deal consists of buying 3 lots, building total of 5 units (residential homes), selling and share the profit.

Lots: 150K

Construction: 750K

 The local developer is responsible for all the operational aspects: finding the lot, lot's buying process (paperwork, zoning, etc), planning/architect, construction and selling. He does not bring his own money into the deal. We (the out of state investors) bring in cash money into the deal.

The cash money does not cover all the expected expenses, and we need a loan. Since we are out of state investors, we cannot get bank loans. Therefore, the local developer also gets bank financing for the project. The loan is expected to be around 750K USD.

For that, we plan to form an LLC, which consists of: us - the out of state investors - and the local developer.

Apparently, the bank requires that the developer will own at least 80% of the LLC, in order to get the loan.

Obviously, this does reflect the reality, and we wanted to consult this distinguished forum, on the following questions:

1. Are you aware of such requirement: that the local developer must own at least 80% of the LLC in order to get a bank loan?

2. Do all banks require that?

3. Is there a workaround?

4. How can we - the out of state investors - protect ourselves in terms of our actual share in the project?

Thank you very much in advance!