Contract for Deed Sale, Legal Issues?

[Preston C.]

I had a guy tell me the other day that Contract for Deed was the way to go with properties over renting. Keep in mind I am from a small town where property values average around $50,000 or so. He said you can get a $10,000 down payment this way and if they miss a payment on time or violate the contract in any way by not paying, you can kick them out and keep the $10,000 they paid for down payment and do it again with the next person. Seemed to me that there may be legal issues with doing this, not to mention it just seems very unethical, and outrageous that someone would be willing to agree to a deal like that anyways on a $20-30k house.

Any ideas on that strategy or how that would work?