While there is a common theory that banks began including a due on sale because they're inherently greedy, which I don't disagree with, I believe lenders were also concerned that their chances of being repaid might be impaired if the new purchaser was less credit worthy, then the Borrower. 

.), the PM was able to find a credit-worthy tenant with an excellent rental history, and signed a 12-month lease at $1,750/month.Lessons learned?

I have a lot of questions, looking to see if it's possible to get other type of loan (non-real estate) out there, and how they work, im not new to business but new to business creditworthiness and/or borrowing in general.

Just a reminder rates vary and lenders take into consideration credit worthiness even with VA backing. 255K @ 4.875. 30 year loan with 100% financing.

The downside, of course, is that you have to apply for a loan, you have to be credit worthy, and you have to make payments, which will likely include principal repayment.

They most likely will look at the asset and your creditworthiness (quite possibly not even the W-2 income).2.

It's worth discussing this option with him and their attorney to determine if it makes sense for your particular situation.Lastly, it's always a good idea to conduct your due diligence and research the borrower's track record, creditworthiness, and past performance on other flips.

Is this Mortgage Backed Security determined based off anything like creditworthiness, risk, etc.?

The amount of equity a seller should have for an owner-financed deal depends on factors like property value, buyer's creditworthiness, and market conditions.

If a buyer fails to make payments it can be time consuming and costly to resolve the issue.A good contract and making sure that the buyer is credit worthy seems a must before doing any seller financed deal.