Who will be responsible to repay the loans (especially if you live in a deficiency judgment state)? 

First thing is I do not order title until the seller sends me the soft collateral file to review - sometimes it has a lost note or some other deficiency that kills the deal right there, so why spend money.

Ian that is a very good idea and I was talking with my partner for the exact same plan, we are planing to take 2 or 3 months max, 50% and deferred the deficiency through one year or less. if it comes to that. 

There are PMs significantly lower than 25% (I have seen STE PM rates as low as 15%) but they are deficient in some aspect.  50% would be double the predominant rate and I would think it unlikely a unit could make any positive cash flow at that rate.  

You won't be getting a deficiency judgment from a note funded by equity either as seller financed notes are installment sales, the transfer of title is irrelevant as to installments paid on equity.

In  addition Texas banks and lenders will go after deficiency judgments on owner occ..

Do a move in inspection and have them sign off on it so any deficiencies are noted.

If they do not pay the deficiency, I typically just turn the account over to a collections agent.

Many times either the title is “clouded”, there’s additional undisclosed liens against the property (especially IRS and property tax liens), the survey or legal description is deficient, the seller doesn’t hold title to all the property he thinks he does, there are easements which negatively affect property use and value; the property is not in zoning compliance, the property was inherited but never went thorough probate, or their are “missing” heirs that may hold an interest in title.  

In these instances attorneys search such records and contact the interested parties in the properties to represent them in filing a lawsuit for a deficient foreclosure.