@Cristal Ochoa @Leiah DotlichI will preface this with the fact that I have a legal background, specifically with estate planning and asset protection.

When its included in a lease for real estate then the laws pertaining to residential rental security deposits in your state apply but when its separate you should have more leeway to get some additional deposit to protect you.

(If you are out of state, you may seriously consider using a good property manager because of screening tenants, vandalism, squatting, and various other reasons -- they do protect your investment).

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.

This could turn a potential loss into positive cash flow while protecting your property’s value.

In some cases, it may not be possible to purchase and store materials, but if it is, that is one way to protect your budget and avoid a costly mistake.The last thing I would offer for you to think about is having a pivot plan. 

As for the property structure, using an LLC offers liability protection, while a land trust provides privacy.

It can be done ethically, but you need safeguards to confirm mortgage & possibly property tax payments made on-time, as well as insurance with you protected.- Also, you need a legal way to take back the deed if buyer defaults!

I have on multiple occasions, once with one of my own properties and a few times for clients been able to not only get the money they paid for a property but also gave them extra money in a total loss (protected the equity that has accrued due to inflation in the industry).  

Lenders that don’t require an appraisal will perform a desktop appraisal but will typically have a very conservative view on the value of the property to protect the company’s investment.