I have two now and I like it for lots of reasons, 1) low entry investment, 2) shared risk, ie if we need a new roof I owe just 50% 3) you can work deals with co-owner (hey I'll pay for plowing if you mow the lawn?).

If it is a voluntary lien (i.e. a mortgage) then you can buy the house "Subject to" the existing mortgage.The risk is that it will be a violation of the due on sale clause and the bank can call the note due.

So the real risk is what happens when you reduce rents.

The models could be adjusted for lease renewal and refinancing risk as well as cap rate fluctuations to see what they do to the NPV of the two alternatives.On the surface, taking payments seems the best route as the only risk is really based on one guy's ability to repay the debt (or his company or family etc).

Also, it can be risky.

If there becomes more investor issues in a community or state, I'd say the political aspects will cause more enforcement, look to the SAFE Act as a response by regulators to the dealings in seller financing.IMO (as with all of this rant) what's the risk? I

Make sure the risk is worth the reward.

There is some risk involved with these "drop and swap" transactions, however approximately 75% of our clients use them as the perception is that the risk is nominal.

Though they have to pay for this service, the idea is that they are saving a ton of time and potentially do not need a big staff to run their investments.On another note, there is another bill circling Congress being dubbed "Jobs Act 2.0" that is specific to real estate - they are looking at specific exemptions to the $500k and $1MM limits due to real estate theoretically being less risky than investing in a start up, for example, and the fact that real estate is a tangible asset.

But as one may learn from a "seminar", or even better a book, is if one puts in the work to create rules of discipline and execution, risk is a number that is offset by a much bigger number....