Always protect yourself by enforcing contracts, and learning to say no. 

Separate checking accounts not required, but you need to maintain separate books and records.The TREC requirement is correct, but odds of enforcement seem low.

And payment of taxes is enforced in dollars by that government.

The first thing I would do is call your local code enforcement office/building department.

So how is the primary residence and/or occupancy requirement “enforced” for example where in the process does it come up for the buyer to prove that they intend to use it for primary residence?  

So, he could still be of value, especially if you are new, but based on the deal coming outside of him, the agreement is not enforceable.

This is what I think I know:- The borrower can choose to pay off the note at any time (by selling the property or just paying off the loan with other funds), so it is important that the legal balance covers my investment and some profit- The borrower could file bankruptcy (can someone confirm that this will only cause delay, but not jeopardize ultimately collecting the legal balance of the note)- Most of these DOTs will have a rent assignment clause, so I could try to enforce that and collect rents from tenants (essentially manage the property) while I am holding the note and trying to foreclose.

., SMS code on login), or at least don't enforce it for me since I chose to signup using Google.

For collections in Southern California, try Sutton Law Center or California Judgment Enforcement.

For example, laminate and tape it to the back of each bedroom door, inside the upper cabinet closest to the refrigerator, in the laundry room, etc.Finally, inspect and enforce.