An agent by law is required to do certain things (any agent, not just RE agents), the duty to communicate all material facts pertaining to the representation, the duty to safeguard the principal's interest and keep information pertaining to the principal's interests confidential and to account for all monies owed to the principal.     

Or if they are trying to offset some taxes, then creating a balloon payment structure each year, may be of benefit to them (would need to consult a CPA first) and if they are generally concerned about how to be the creditor, if you can show them you fully understand how to safeguard their loan, would be useful.

If you live far away, professional property management is an extra expense you simply must incur to safeguard your investment.Experienced builder and property manager Rusty Meador notes, "No matter how good of a real estate deal you find, it is only as good as its ability to be managed well."

The upstairs tenants are great and have small kids, and I feel that in addition to safeguarding our investment we have a duty to the upstairs tenants as well.

3- If the seller stops making payments although still collecting from the buyer4- If said sale is a residential property subject to the Frank Dodd Act, the jurisdiction of the Consumer Finance Protection Bureau, and or state laws dealing with (a) homesteads and (b) contract for deedsAlthough some safe guards can be memorialized in legal documents, the chances for problems are numerous and varied.  

I have a "roommates" in residence to safeguard my interests so the property earns just enough income to cover all the costs. 

@Sam RustI second Quest IRA, however I use Safeguard Advisors and @Brian Eastman and I refer our clients over there for note investing businessDifferences between the two:Quest IRAIf your client is testing the waters of the SDIRA world and the opportunities that await in RE, then I think Quest is great. 

In the 1930s we didn’t have the financial safeguards that we do now.

That is why it's important to have safeguards in place.

As far as a traditional partnership, of course there needs to be safeguards in place in order to protect each persons interests.