Buying an owner financed house. What's important?

[David A.]

My friend told me today that he is moving to my area. He is buying it from an investor owner financed @ 10% interest for $108k. The investor purchased the home for $80k and put another 10k into it "supposedly". He is due to sign the contract on at the end of the month. From my quick research it seems this investor is pretty new. What should be a priority when buying a house owner finance? He doesn't want to get an inspection which I think is totally absurd. The house was built 2005 but you never know!
Does the investor have to use a third party loan serving company? I want to make sure they do things right. He is planning on paying down his loan within a year to around $80k so he can refinance.