By the way, the reason I called him the devil jokingly is he was saying by the time he’s done with a bank trying to foreclose or worse one of us, they would be paying a million in legal fees as he’d hit them with 3 Respa violations a day and some error deficiency thing he’d be constantly filing.

Unless the property was misrepresented, or the buyers in some way are mentally deficient, I see no problem there.

If the loan failed to complete successfully, part or all of the 20% would be applied as necessary to correct any deficiency in the loan balance.These loans would be made only for home located in land lease communities, and only in states that permit unrestricted chattel lending, that have signed a community agreement between the lender and the community.As part of the joint venture, you would be required to assist in any necessary collateral recovery and security.All interest and fees would belong to the 80% lender who would be legally licensed and fully compliant with state and federal laws.You would agree to have and maintain a compliance management system sufficient for a retailer and/or community as required by state and federal law to protect the licensed lender from third party liability.Yes or No?

I was wondering about the suggestion to ask for $500 or so up front in case the seller backs out of doing a short sale when they find out there will be a deficiency judgment.

It is the responsibility of the Tenant to notify the Landlord of a deficiency in the premise.

But its power lies in the fact that you don't have to over pay for a deficient asset just to burn up 1031 funds. 

The lower the sales price, the greater the deficiency.

Advantages and disadvantages of purchasing notes instead of property within a Self-Directed IRA.Overall comments or deficiencies in the plan I have outlined above?

If maximum amount is exceeded use HomeStyle Renovation program.Contingency ReserveA contingency reserve equal to 10% of the total costs of the repairs/improvements must be established and funded for all mortgages to cover required unforeseen repairs or deficiencies that are discovered during the renovation.Contractor Validation Contractor is selected by the borrower and approved by the lenderContractor validation will be completed by the Renovation DepartmentMaximum of three (3) contractorsGeneral Contractor is preferred but not requiredFollow state and local requirements for licensing of contractor(s).

You signed the note personally, any transfer of the property will note keep a lender from going after you personally in the event of default or deficiency, regardless of who else or where the collateral sits...2.