This means determining if the field is sufficiently permeable to absorb liquid flowing into it.

The property sold to a 3rd party at auction and we were finally able to liquidate this note that was sub performing for years!

The factor that I see being tough at least just off the cuff, might be your liquidity/down payment available. 

At the end of the day, though, this is speculating more than it is investing :) Side question:  What kind of thing is going to be paying you a guaranteed 12% interest indefinitely and with liquidity? 

I have just enough liquidity to purchase outright but this would leave me a bit tight.  

I definitely think it a time to tread cautiously and with intention, tighten up underwriting, maintain a level of liquidity to weather the current cycle.

Commercial lending is currently robust, and these sorts of arrangements do not provide liquidity for sellers or perhaps the ability to do exchanges, creating personal tax issues, etc.   

If they get into financial trouble, they can show on the balance sheet they have the asset and may be forced to liquidate it to another note holder but that has zero impact on you.If it was done via contract for deed, then you would want to record your interest in the property (The CFD), and even though the deed is in the sellers need you have an interest in the property and again they may be forced to sell the contract for deed.

I recently sold a property to get more liquid, but am paying off some properties, so, if the crap hits the fan, to be able to be able to weather a storm. 

Gain experience, create some liquidity, and then any bank would take you serious and now you can even by a 4 unit building under a fix n flip 12 month loan, get 90% of the purchase and all the rehab money.