1.That someone will scam me by selling paper that they no longer own or there is a gap in assignment 2.

Many times the additional risk with ACV is glossed over without putting pencil to paper and putting a true $ figure to what the loss could be.Once you really know what is at risk, you may find that on a certain smaller property, $100 of premium savings is only $7k of additional risk, while on a larger building $300 of savings gives you $50k of risk. 

What are the pros and cons of a seller wanting to lend paper rather than an outright sale?

Cash flow for lower-tier props can look amazing on paper, but there are a lot of other factors that make real-world returns less impressive.

If it does do couple more times until I can show real investors not just family/friends that ive done it and your not investing your money into a novice.Granted advice here is just my plan on paper so take that for what’s it worth.

Or because they can't find any paper trail for the conversion of a single to a three family then is the current use of the property in violation?

Inversely, lots of new investors gravitate to C and D neighborhoods, because the profits look better on paper. 

I called the plumber, who after fixing the clog told me that it was because of paper towels being flushed.

CA does not just consider the words on a paper. 

I’ve seen her snap out before and her history on paper (violence, rental issues) suggests she could be a problem.