Please critique my plan...

[Chris M]

I want to buy properties at a discount then owner finance them at a much higher interest rate than I am paying. Here is an example:

I buy a home for 35k @ 5.75%. I then owner finance to someone for 70k @ 9.5%. To protect myself I require a $3000 - $4000 down payment in case of default to cover expenses till I sell againThis money is not spent on anything and is placed in a high interest money market account only spent in case of emergency for that property. .I keep taxes and insurance current and add that money to their monthly payment.

I borrow the equity from the first house to purchase the next and repeat the process. I know this is nothing new I just want to see what you guys think.