I would rather give friends and family a 10% rate than a complete stranger.I've been thinking about private money to help finance more acquisitions and like the concept of preferred equity arrangements.

In real estate, you are not judged by what number of arrangements you close a year.

@Ryan Louie, do you have some kind of written document documenting the arrangement?  

What would be option for financing I could suggest to a seller of a single family home.Owner (seller) contacted me and want to sell us their house, the owner is ill and son has lived with him for past 8 years, They would like to be able to rent the home from us for the next 2 years after we buy it. this would be private sale no Realtor fees.What is a good way to finance with out a bank, I have cash and could pay about 2/3 of cost of house upfront and do some type of arrangement for payment on balance.

Great idea on two separate arrangements.

I doubt the seller is going to turn over keys to you; you'll have to make arrangements between the buyer & seller.

You'd need to sort out all of that in advance and make your lease really explicit about the arrangement, because it seems like they could be easily taken advantage of if they don't completely understand the setup.  

Why not arrange for mechanic's lien settled at closing?

Maybe a credit partner would be the answer I might need to work my network but usually what is a good arrangement / agreement on this situations ?

The arrangements are that he paid for the property and I am paying his loan plus interest.