Whoever sent you the PM is right. If your seller wants to have the property serve as his/her exclusive collateral, you’ll need to structure it as preferred equity, as opposed to a second mortgage. The seller would just become part of your org structure, which the lender will need to approve.
Keep in mind that the remedies are much different for a pref equity loan, so it will depend on how sophisticated the seller is and if he has good legal representation. As a seller, I would not want to provide a pref equity loan to a buyer I don’t know since it doesn’t afford me the same foreclosure remedies.