@Donald Hatter We send the information to a collection agency who attempts to recover the money; after they make several attempts they place it on their credit report. 

I believe only a relatively small amount of people attempt liens and notes in the first place.By volume, the most dangerous are OOS BRRRR and OOS flips, especially in cheap and very cheap neighborhoods - well below the median price.

Good luck with your future endeavors! 

Not a casual endeavor.

It seems like shes afraid of what you're going to do to her so shes lashing out in an attempt to keep her living the way it is.

During that time the property had appreciated significantly and the seller was attempting a "shake down" to regain the property or get the appreciation, which he lost.

My humble advice to anyone attempting to do creative finance is:Creative finance is for experienced investors who have access to capital if anything goes wrong.Learn the lawsDon't use a contract "off the internet", laws vary by state and are also regulated on a federal levelLearn the financing techniques correctlyDon’t skip parts of the processDon’t ever do a “kitchen table” closingUse the proper deedAn attorney can help you with the legal work, but the rest you are on your ownYour guru will not bail you out“Investing” in someone else’s deal by providing a small 2nd loan so the “investor” can pay for “cash to the seller” and for “closing costs” so he can do the deal is a very bad planKnow what problems can ariseLearn the responses and solutions to problems before they are neededKnow everything there is to know about Title and what that meansKnow who a "protected class" individual isLearn the "back doors"Learn human natureUnderstand timelinesUnderstand regulation enforcement (some of these "mistakes" have a 10 year statue of limitations ( they can charge you 10 years AFTER you do the transaction) and carry hefty fines and possible imprisonmentThe court doesn't accept "I didn't know" for an answer"Know that the source of the lead plays a serious role in some states and federallyKnow how much of a "profit" pushes the boundaries to invite an investigationYou can be sued by the seller if you don’t do things correctlyYou are automatically at fault if an investigator or attorney or regulator gets involved.

I'm thinking now though that it may be more appropriate to attempt that a little further on down the road once my own personal risk tolerance could accept it.

If you said the property was valued at $200k, then 2nd position may still bid in an attempt to run up the numbers depending on what kind of haircut they're looking at. 

I would first attempt a 2-4 unit to get the experience under your belt.