Any lender will be held to a higher standard than say a partner, but any party to any business arrangement has similar duties.

That would give me the time needed to arrange a much lower interest self-loan from my 401k funds.If they require the actual cash sitting in my checking account I could loan myself $50k of 401k funds.

You can arrange this with them yourself, there will be some costs, but with liens involved I don't think you want to risk not doing this.

I spoke to him on the phone and trusted his judgment.I made some calls to known buyers who I had worked with before and offered them the property.I controlled the property with a sale or option contract, in some of these I was also a lender so I had additional "control".Working the phone I arranged contracts, coordinated settlement with a title company who was fully aware of what was going on.

I'm curious what use case you've come across for this sort private lending arrangement? 

Luckily, I work a block from the property and our schedules mesh, so I don't see a real problem with keeping up this arrangement.

Sellers also don’t get hit with outrageous capital gains all at once.Some cons of this type of arrangement is you may pay a little higher interest rate than you would with a traditional bank loan.

The issue is we made arrangements to take the house over after the 30 days and to change our plans now would cause us financial harm.

And same can be said for HNW(high net wealth) Tenants, some don't have the personality to stand the tenant complaints that all the landscaping is 1 color of flower vs an arrangement, or this or that nit picking type of thing like "those wall colors are so last season" lol. 

This was a much preferred living arrangement for her & her children.