For example if you owned your previous home, had plenty of equity, worked out a forbearance or deferment arrangement with your current mortgage company, the mortgage on the new loan was less per month than renting in your area (common in Houston) and truly have a plan for exiting the old house, as in you have the means to repair it or the equity to be able to let it go as-is and not be upside down.Or you are well within a floodplain, so you have flood insurance and you'll have a payout, maybe you've flooded before, and and it's just time to move to higher ground.

Because of the arrangement, that's more or less who this person would be at the end of the day given that they would be responsible for more than 75% of your income. 

The answers given include that the borrower is trying to arrange permanent financing so they are not sure.Wouldn't the time to arrange for permanent financing be before the loan is due?

So,Mike, you say that every deal you do, is usually arranged through seller financed terms?

And if we are shooting ourselves in the foot by maintaining this arrangment and not allowing someone like Madison to collect payments, i'd like to know why.You bring up a good point that it could get messy if there was a dispute, but are there any other reasons that we should consider?

You can add late fees automatically and there are no excuses for things like, arranging time to meet, or not having another check...

I'm looking to owner-occupy a fourplex (not yet under contract) and would prefer to arrange for financing ahead of time.

If this is a non- prohibited arrangement and thus allowed, how long does it take to set up the self-direct fund and do I use an attorney, my investment company Merrill Lynch or some other professional?

Are there any potential pitfalls or specific things I should do in regards to a lease with an arrangement like this?

The city has arrangements with the power and water companies to turn off utilities for illegal short term rental properties.