They have to claim it on their taxes as interest income, but still, in a low interest environment, many boomers wanting to retire or downsize can find owner financing a solid investment since they're making several times what they would on a similar cash deposit in a bank somewhere. 

For the multi family properties, it tends to be a bit more challenging.

managing people/tenants and finding good deals are in my view the most challenging.

I'm finding the biggest challenge is obtaining financing that works for us for our rehab deals.  

There are multiple considerations here beyond managing reservations and cleanings and if you only have one property I think you will find it cost prohibitive and creating other challenges. 

I'm a Newbie to real estate investing, super excited and abit anxious about the challenge of getting started(beginner nerves I guess).I'm diving in because I want to acheive financial independence for my family through passive income.

And I probably know exactly the thoughts, challenges, questions, and information overload, etc. that you might be feeling and experiencing right now.And I know the "iceberg" and the "elephant" seem very daunting right now.What helped me go from buying a duplex to buying 100+ unit deals is boiling down this business into 2 simple things, Deals and Dollars.I share more of this approach in a thread if you want to read, I quit my CPA Job to buy Large Apartment BuildingsTo summarize though, the road ahead for you will most likely have many twists and turns, challenges and setbacks.

Getting into my first deal has been challenging, but I'm forging ahead.  

@Jay Hinrichs$1M is a lot for seed stage ventures in most areas of the country; Silicon Valley's valuations and general business environment excluded.  

I live in the boom/bust roller coaster environment of the Permian basin and my profession is as an architect.