However, there is no specific holding period contained in the tax code or regulations and there is no "safe harbor." 

From a tax standpoint, there are additional disclosures to make when selling a business asset for less than fair market value to a related third party. 

even if its interest only, id want to pay down principal here and there. seems like sellers would offer this interest only route so they have 0 capital gains tax, but id rather pay down a bit of principal in 7yrs. i see its not required but it should allow for principal paydown in promissary note3) any general advice to look out for on seller financing?

In this market, I would not finance a first time flipper at 75% profit split because the profits and success rate is lower than the last dozen years.  

When we looked at what his cashflow is currently, and then considered what he would net out of a sale post tax, he decided to keep owning the properties.

If it's already turnkey that means you're paying higher rates than necessary when you could put 20% down and get a DSCR loan with lower rates and fees. 

Just the different brand name lowers the cost dramatically!

Be mindful of short-term capital gains tax, as profits from flips held for less than a year are taxed as ordinary income, and frequent flipping may result in self-employment taxes.While profits from flips do not qualify for 1031 exchanges (since flips are considered inventory, not investment properties), you can minimize your tax burden by deducting allowable expenses like renovation costs, loan interest, and holding expenses.If you're considering diversifying into rentals, explore opportunities to benefit from long-term tax advantages such as depreciation and lower long-term capital gains rates.

I've had smooth loans close with Kiavi and I've had rough ones, same with Roc.When Loans start to be troublesome:1) The borrowing entity docs are a mess2) The appraisal numbers are lower than expected3) Messy background reports4) Loans happening in an environment where market/rate fluctuating unpredictably 5) Your loan officer and their team are poor at their job6) Title issues that depend on county docs, that can be slow and painfulThere's more but it's Friday and I'm tired....

The sellers you are dealing with in these situations don't deal with prorating Taxes, or any other kind of prorations, that is what an escrow agent does.