I do seller financed transactions frequently. 

Owning a lot of SFHs for cash means low levels of risk, but also lower levels of return, since cash locked into a home is only performing at the rate of return for that home, rather than leveraged for maximum return.

Hi @Alex Zuroff, You are describing a Reverse 1031 Exchange transaction. 

If the owner bought the place at a much lower price point, he may well be making a fine cash flow.

Being a recent graduate out of college, I don't have a ton of funds, so I've been looking into using a lower money-down loan such as an FHA.  

@Brianni Johnson, I use Ana Esteves of Esteves Law for all my transactions.

@Mark Watkins   well the 20k was a dead give away to me.. any lender that is doing deals will usually have a 75 to 100k minimum... check out the scottsmans guide there will be a list of REPUTABLE lenders there and you will see very few make loans for less than 100k... now in the mid west I know you need them lower than that.. but as a lender and I have been one... its just a loser to try to make little loans .. you can't charge enough to make the risk even close to worth it..so when I see these guys say they make loans at 20k to 20 million  RED FLAG... 

The property is fully rented, albeit at lower than market values.  

I will talk to a broker to make sure I do my transaction correctly.

We are both buyers and private lenders (our own funds) on lower $ ARV SFR properties throughout the U.S.