diff --git a/packages/@n8n/create-node/README.md b/packages/@n8n/create-node/README.md
index 9f02fec7cf..14f3d58496 100644
--- a/packages/@n8n/create-node/README.md
+++ b/packages/@n8n/create-node/README.md
@@ -7,19 +7,19 @@ A powerful scaffolding tool to quickly create custom n8n community nodes with be
 Create a new n8n node in seconds:
 
 ```bash
-pnpm create @n8n/node
+npm create @n8n/node@latest # or pnpm/yarn/...
 ```
 
 Follow the interactive prompts to configure your node, or specify options directly:
 
 ```bash
-pnpm create @n8n/node my-awesome-node --template declarative/custom
+npm create @n8n/node my-awesome-node --template declarative/custom
 ```
 
 ## 📋 Command Line Options
 
 ```bash
-pnpm create @n8n/node [NAME] [OPTIONS]
+npm create @n8n/node [NAME] [OPTIONS]
 ```
 
 ### Options
@@ -41,7 +41,7 @@ pnpm create @n8n/node [NAME] [OPTIONS]
 The CLI will guide you through setting up your node:
 
 ```
-$ pnpm create @n8n/node
+$ npm create @n8n/node
 ┌ @n8n/create-node
 │
 ◇ What is your node called?
@@ -65,7 +65,7 @@ $ pnpm create @n8n/node
 │
 ◇ Next Steps ─────────────────────────────────────────────────────────────────────╮
 │                                                                                  │
-│  cd ./my-awesome-api-node && pnpm run dev                                       │
+│  cd ./my-awesome-api-node && npm run dev                                       │
 │                                                                                  │
 │  📚 Documentation: https://docs.n8n.io/integrations/creating-nodes/            │
 │  💬 Community: https://community.n8n.io                                        │
@@ -86,7 +86,7 @@ cd ./my-awesome-api-node
 ### 2. Start development server
 
 ```bash
-pnpm dev
+npm run dev
 ```
 
 This command:
@@ -109,28 +109,28 @@ Your generated project comes with these convenient npm scripts:
 
 ### Development
 ```bash
-pnpm dev
+npm run dev
 # Runs: n8n-node dev
 ```
 
 ### Building
 ```bash
-pnpm build
+npm run build
 # Runs: n8n-node build
 ```
 
 ### Linting
 ```bash
-pnpm lint
+npm run lint
 # Runs: n8n-node lint
 
-pnpm lint:fix
+npm run lint:fix
 # Runs: n8n-node lint --fix
 ```
 
 ### Publishing
 ```bash
-pnpm run release
+npm run release
 # Runs: n8n-node release
 ```
 
@@ -139,7 +139,7 @@ pnpm run release
 ### Build for production
 
 ```bash
-pnpm build
+npm run build
 ```
 
 Generates:
@@ -151,7 +151,7 @@ Generates:
 ### Quality checks
 
 ```bash
-pnpm lint
+npm run lint
 ```
 
 Validates:
@@ -163,13 +163,13 @@ Validates:
 Fix issues automatically:
 
 ```bash
-pnpm lint:fix
+npm run lint:fix
 ```
 
 ### Publish your node
 
 ```bash
-pnpm run release
+npm run release
 ```
 
 Runs [release-it](https://github.com/release-it/release-it) to handle the complete release process:
@@ -238,28 +238,28 @@ Choose the right template for your use case:
 ```bash
 # Clear n8n node cli cache and restart
 rm -rf ~/.n8n-node-cli/.n8n/custom
-pnpm dev
+npm run dev
 ```
 
 **TypeScript errors:**
 ```bash
 # Reinstall dependencies
-rm -rf node_modules pnpm-lock.yaml
-pnpm install
+rm -rf node_modules npm-lock.yaml
+npm install
 ```
 
 **Build failures:**
 ```bash
 # Check for linting issues first
-pnpm lint --fix
-pnpm build
+npm run lint --fix
+npm run build
 ```
 
 **Development server issues:**
 ```bash
 # Clear cache and restart development server
 rm -rf ~/.n8n-node-cli/.n8n/custom
-pnpm dev
+npm run dev
 ```
 
 ## 🔧 Advanced Usage
@@ -269,7 +269,7 @@ pnpm dev
 If you prefer to use your own n8n installation:
 
 ```bash
-pnpm dev --external-n8n
+npm run dev --external-n8n
 ```
 
 ### Custom User Folder
@@ -277,7 +277,7 @@ pnpm dev --external-n8n
 Specify a custom location for n8n user data:
 
 ```bash
-pnpm dev --custom-user-folder /path/to/custom/folder
+npm run dev --custom-user-folder /path/to/custom/folder
 ```
 
 ## 📚 Resources
diff --git a/packages/@n8n/create-node/bin/create-node.cjs b/packages/@n8n/create-node/bin/create-node.cjs
new file mode 100755
index 0000000000..cb89956e38
--- /dev/null
+++ b/packages/@n8n/create-node/bin/create-node.cjs
@@ -0,0 +1,11 @@
+#!/usr/bin/env node
+
+const { spawnSync } = require('child_process');
+
+const n8nNodeBin = require.resolve('.bin/n8n-node');
+
+const result = spawnSync(n8nNodeBin, ['new', ...process.argv.slice(2)], {
+	stdio: 'inherit',
+});
+
+process.exit(result.status ?? 1);
diff --git a/packages/@n8n/create-node/bin/create.js b/packages/@n8n/create-node/bin/create.js
deleted file mode 100755
index 5608e90b16..0000000000
--- a/packages/@n8n/create-node/bin/create.js
+++ /dev/null
@@ -1,9 +0,0 @@
-#!/usr/bin/env node
-
-import { spawnSync } from 'node:child_process';
-
-const result = spawnSync('n8n-node', ['new', ...process.argv.slice(2)], {
-	stdio: 'inherit',
-});
-
-process.exit(result.status ?? 1);
diff --git a/packages/@n8n/create-node/package.json b/packages/@n8n/create-node/package.json
index d4820749ed..96a2149403 100644
--- a/packages/@n8n/create-node/package.json
+++ b/packages/@n8n/create-node/package.json
@@ -1,16 +1,16 @@
 {
   "name": "@n8n/create-node",
-  "version": "0.5.0",
+  "version": "0.6.0",
   "description": "Official CLI to create new community nodes for n8n",
   "bin": {
-    "create-n8n-node": "bin/create.js"
+    "create-node": "bin/create-node.cjs"
   },
   "files": [
     "bin",
     "dist"
   ],
   "scripts": {
-    "start": "node bin/create.js"
+    "start": "node bin/create-node.cjs"
   },
   "repository": {
     "type": "git",
@@ -18,5 +18,8 @@
   },
   "dependencies": {
     "@n8n/node-cli": "workspace:*"
+  },
+  "devDependencies": {
+    "@n8n/typescript-config": "workspace:*"
   }
 }
diff --git a/packages/@n8n/node-cli/README.md b/packages/@n8n/node-cli/README.md
index 350e30c7dd..e8f62e3216 100644
--- a/packages/@n8n/node-cli/README.md
+++ b/packages/@n8n/node-cli/README.md
@@ -7,45 +7,45 @@ Official CLI for developing community nodes for n8n.
 **To create a new node**, run:
 
 ```bash
-pnpm create @n8n/node
+npm create @n8n/node@latest # or pnpm/yarn/...
 ```
 
-This will generate a project with `pnpm` scripts that use this CLI under the hood.
+This will generate a project with `npm` scripts that use this CLI under the hood.
 
 ## 📦 Generated Project Commands
 
-After creating your node with `pnpm create @n8n/node`, you'll use these commands in your project:
+After creating your node with `npm create @n8n/node`, you'll use these commands in your project:
 
 ### Development
 ```bash
-pnpm dev
+npm run dev
 # Runs: n8n-node dev
 ```
 
 ### Building
 ```bash
-pnpm build
+npm run build
 # Runs: n8n-node build
 ```
 
 ### Linting
 ```bash
-pnpm lint
+npm run lint
 # Runs: n8n-node lint
 
-pnpm lint:fix
+npm run lint:fix
 # Runs: n8n-node lint --fix
 ```
 
 ### Publishing
 ```bash
-pnpm run release
+npm run release
 # Runs: n8n-node release
 ```
 
 ## 🛠️ CLI Reference
 
-> **Note:** These commands are typically wrapped by `pnpm` scripts in generated projects.
+> **Note:** These commands are typically wrapped by `npm` scripts in generated projects.
 
 ```bash
 n8n-node [COMMAND] [OPTIONS]
@@ -76,7 +76,7 @@ n8n-node new n8n-nodes-my-app --force
 n8n-node new n8n-nodes-my-app --template declarative/custom
 ```
 
-> **Note:** This command is used internally by `pnpm create @n8n/node` to provide the interactive scaffolding experience.
+> **Note:** This command is used internally by `npm create @n8n/node` to provide the interactive scaffolding experience.
 
 #### `n8n-node dev`
 
@@ -172,13 +172,13 @@ The recommended workflow using the scaffolding tool:
 
 1. **Create your node**:
    ```bash
-   pnpm create @n8n/node my-awesome-node
+   npm create @n8n/node my-awesome-node
    cd my-awesome-node
    ```
 
 2. **Start development**:
    ```bash
-   pnpm dev
+   npm run dev
    ```
    - Starts n8n on `http://localhost:5678`
    - Links your node automatically
@@ -188,17 +188,17 @@ The recommended workflow using the scaffolding tool:
 
 4. **Lint your code**:
    ```bash
-   pnpm lint
+   npm run lint
    ```
 
 5. **Build for production**:
    ```bash
-   pnpm build
+   npm run build
    ```
 
 6. **Publish**:
    ```bash
-   pnpm run release
+   npm run release
    ```
 
 ## 📁 Project Structure
@@ -244,16 +244,16 @@ The CLI reads configuration from your `package.json`:
 rm -rf ~/.n8n-node-cli/.n8n/custom
 
 # Restart development server
-pnpm dev
+npm run dev
 ```
 
 ### Build failures
 ```bash
 # Run linting first
-pnpm lint
+npm run lint
 
 # Clean build
-pnpm build
+npm run build
 ```
 
 ## 📚 Resources
diff --git a/packages/@n8n/node-cli/package.json b/packages/@n8n/node-cli/package.json
index 28c2134dcb..61efe96085 100644
--- a/packages/@n8n/node-cli/package.json
+++ b/packages/@n8n/node-cli/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@n8n/node-cli",
-  "version": "0.5.0",
+  "version": "0.6.0",
   "description": "Official CLI for developing community nodes for n8n",
   "bin": {
     "n8n-node": "bin/n8n-node.mjs"
diff --git a/packages/@n8n/node-cli/src/commands/dev/index.ts b/packages/@n8n/node-cli/src/commands/dev/index.ts
index cbf98ca869..65c7812281 100644
--- a/packages/@n8n/node-cli/src/commands/dev/index.ts
+++ b/packages/@n8n/node-cli/src/commands/dev/index.ts
@@ -1,4 +1,4 @@
-import { intro, outro, spinner } from '@clack/prompts';
+import { intro, outro, spinner, log } from '@clack/prompts';
 import { Command, Flags } from '@oclif/core';
 import os from 'node:os';
 import path from 'node:path';
@@ -18,7 +18,7 @@ export default class Dev extends Command {
 	static override examples = [
 		'<%= config.bin %> <%= command.id %>',
 		'<%= config.bin %> <%= command.id %> --external-n8n',
-		'<%= config.bin %> <%= command.id %> --custom-nodes-dir /opt/n8n-extensions',
+		'<%= config.bin %> <%= command.id %> --custom-user-folder /Users/test',
 	];
 	static override flags = {
 		'external-n8n': Flags.boolean({
@@ -29,7 +29,7 @@ export default class Dev extends Command {
 		'custom-user-folder': Flags.directory({
 			default: path.join(os.homedir(), '.n8n-node-cli'),
 			description:
-				'Folder to use to store user-specific n8n data. By default it will use ~/.n8n-node-cli. You probably want to enable this option if you run n8n with a custom N8N_CUSTOM_EXTENSIONS env variable.',
+				'Folder to use to store user-specific n8n data. By default it will use ~/.n8n-node-cli.',
 		}),
 	};
 
@@ -67,25 +67,52 @@ export default class Dev extends Command {
 
 		linkingSpinner.stop('Linked custom node to n8n');
 
-		outro('✓ Setup complete');
-
 		if (!flags['external-n8n']) {
-			// Run n8n with hot reload enabled
-			runPersistentCommand('npx', ['-y', '--quiet', 'n8n'], {
-				cwd: n8nUserFolder,
-				env: {
-					...process.env,
-					N8N_DEV_RELOAD: 'true',
-					N8N_RUNNERS_ENABLED: 'true',
-					DB_SQLITE_POOL_SIZE: '10',
-					N8N_USER_FOLDER: n8nUserFolder,
-					N8N_ENFORCE_SETTINGS_FILE_PERMISSIONS: 'false',
-				},
-				name: 'n8n',
-				color: picocolors.green,
-			});
+			let setupComplete = false;
+			const npxN8nSpinner = spinner();
+			npxN8nSpinner.start('Starting n8n dev server');
+			log.warn(picocolors.dim('First run may take a few minutes while dependencies are installed'));
+
+			// Run n8n with hot reload enabled, always attempt to use latest n8n
+			// TODO: Use n8n@latest. Currently using n8n@next because of broken hot reloading before n8n@1.111.0
+			await Promise.race([
+				new Promise<void>((resolve) => {
+					runPersistentCommand('npx', ['-y', '--quiet', '--prefer-online', 'n8n@next'], {
+						cwd: n8nUserFolder,
+						env: {
+							...process.env,
+							N8N_DEV_RELOAD: 'true',
+							N8N_RUNNERS_ENABLED: 'true',
+							DB_SQLITE_POOL_SIZE: '10',
+							N8N_USER_FOLDER: n8nUserFolder,
+							N8N_ENFORCE_SETTINGS_FILE_PERMISSIONS: 'false',
+						},
+						name: 'n8n',
+						color: picocolors.green,
+						allowOutput: (line) => {
+							if (line.includes('Initializing n8n process')) {
+								resolve();
+							}
+
+							return setupComplete;
+						},
+					});
+				}),
+				new Promise<void>((_, reject) => {
+					setTimeout(() => {
+						const error = new Error('n8n startup timeout after 120 seconds');
+						onCancel(error.message);
+						reject(error);
+					}, 120_000);
+				}),
+			]);
+
+			setupComplete = true;
+			npxN8nSpinner.stop('Started n8n dev server');
 		}
 
+		outro('✓ Setup complete');
+
 		// Run `tsc --watch` in background
 		runPersistentCommand(packageManager, ['exec', '--', 'tsc', '--watch'], {
 			name: 'build',
diff --git a/packages/@n8n/node-cli/src/commands/dev/utils.ts b/packages/@n8n/node-cli/src/commands/dev/utils.ts
index e055bd0223..09d5059fd6 100644
--- a/packages/@n8n/node-cli/src/commands/dev/utils.ts
+++ b/packages/@n8n/node-cli/src/commands/dev/utils.ts
@@ -25,8 +25,14 @@ export function commands() {
 	function runPersistentCommand(
 		cmd: string,
 		args: string[],
-		opts: { cwd?: string; env?: NodeJS.ProcessEnv; name?: string; color?: Formatter } = {},
-	): void {
+		opts: {
+			cwd?: string;
+			env?: NodeJS.ProcessEnv;
+			name?: string;
+			color?: Formatter;
+			allowOutput?: (line: string) => boolean;
+		} = {},
+	) {
 		const child = spawn(cmd, args, {
 			cwd: opts.cwd,
 			env: { ...process.env, ...opts.env },
@@ -46,6 +52,7 @@ export function commands() {
 		}
 
 		const log = (text: string) => {
+			if (opts.allowOutput && !opts.allowOutput(text)) return;
 			if (opts.name) {
 				const rawPrefix = `[${opts.name}]`;
 				const prefix = opts.color ? opts.color(rawPrefix) : rawPrefix;
@@ -71,6 +78,8 @@ export function commands() {
 			console.log(`${opts.name ?? cmd} exited with code ${code}`);
 			process.exit(code);
 		});
+
+		return child;
 	}
 
 	return {
diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index 0fb75a7070..4ba8594a7b 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -647,6 +647,10 @@ importers:
       '@n8n/node-cli':
         specifier: workspace:*
         version: link:../node-cli
+    devDependencies:
+      '@n8n/typescript-config':
+        specifier: workspace:*
+        version: link:../typescript-config
 
   packages/@n8n/db:
     dependencies: