Get cash in hand and keep the security deposit approach as a backup to protect those funds for any damage caused.Court would be my last resort. 

Is there a check list or something that people commonly use before giving a loan to be sure that they are protected from common issues? 

All you have is equitable title, and the property no longer has any equity due to the lien.I realize this may be a very rare event, but do you do anything to protect yourself/your investment of time and effort from this kind of scenario? 

I have been fortunate to have a couple of great partners, and having things in writing is especially important in maintaining relationships that are already good, in addition to protecting yourself.

Sometimes HELOC appraisals aren't to the detail that some loans require.Keep in mind the point of the appraisal in this case isn't to put a market value on your house as much as to ensure the bank's protected if you default.

Is there a tax deduction/protection strategy for a 67 year old to hold a note on a capital gains tax?

I wanted to pick anyone's brain that is familiar with this new law Cuomo signed into the Statewide Housing Security & Tenant Protection Act of 2019 and the Housing Stability & Tenant Protection Act of 2019 (the Acts).

We have codes that require us to use impact windows or suitable storm protection. 

Is there any protect for the end buyer on this type of deal?

Life insurance is the perfect product for this type of arbitrage because the cash value is principal-protected and earns a long term rate of return that is likely to be at or greater than the borrowing cost.