TxEagle,
There is a book called "How to Build a Real Estate Money Machine" by Wade Cook that covers basically the same concept as Lonnie, but with SFHs. He would buy homes with low down payments (by seller financing or assuming loans), rehab them modestly (a couple thousand), then get his down payment and rehab costs back in the down payment from the buyer and the difference in equity he carried on a note.
But like others have already said, the huge cash flow and low investment is the appeal with Lonnie deals. Also, not having to go through title companies and formal closings is another benefit of Lonnie Deals.
You can also do similar deals with land. There's a developer in my town who buys large tracts of land, divides them, put wells and septics on them, and sells an acre lot for $38,000 with no credit check. The terms are $1,000 down and 500 or so dollars a month.
