If seller files bankruptcy the servicer will not take payments and you get entangled.

I.E. seller declares bankruptcy, etc. 

I will circle back on Monday (talking with the bankruptcy lawyer and the loan people, and will add this to the list of questions I have.)

My position: Creative financing is a great tool that should be discussed and understood by investors. 100% financing from a position of financial weakness (bad credit, low/no income, low cash reserves) is a tremendously dangerous position to take, and investors should understand that bankruptcy is a likely outcome - maybe even a coin flip, on many such investments. 

I feel like I've heard Pace talk about his GC business, and how he filed bankruptcy due to someone owing him money.

If you save 20% of your income for 40 years and you never divorce, you never have a major medical emergency (the number one reason people file for bankruptcy), the government never changes how they tax 401(k)s (that in itself is a huge problem down the road for investors), if we don't "overspend as a country" and go into hyper inflation, (think about that one for a minute), if we never have another war like Vietnam or WWII, if we never have an energy crisis like 1973, if Wall Street is Honest -  you still have black swan events and hidden fees in your 401(k). 

If the seller files bankruptcy in the future you have to prove to the court that you bought the house fairly.

Although we have personal guarantees for our commercial loans, Bankruptcy laws, if SHTF, we will keep our house.C. 

So, If you get sued, if they carry through the process, if it goes to trial, and if they win, and if the court awards them a judgment against you, you can most likely file bankruptcy and wipe it all out anyway.

I would think the one not going through bankruptcy would be on the hook still.