Regardless, even if they were fantastic to deal with, I still would not ever agree to write them a check directly when I could simply wire funds into a safe and secure escrow account. if they say that is not an option, then your response should be, "then me buying from you is NOT an option".

The LTV is safe, but you will either need to service the debt out of pocket or have a lender structure an interest reserve. 

If you plan on lending to owner occupants (this is probably not a good idea) you should also become familiar with Dodd-Frank and the SAFE-Act.

@Shawn ConnorsJust to safe I would go with the ARV being 95k only and the estimated repairs being 28k which would put that the offer price at $38,500 using the 70% rule.

Not saying you would do anything like that, but clearly this person would rather be safe than sorry.  

Stay within the law, make your properties safe and habitable and you will have nothing to be terrified of.

Getting your real (net of inflation) returns to north of 4% like what the traditional financial planners tell you is the "safe" withdrawal rate does wonders for your expense multiple.  

At the end of the day, I want to make a decent passive income in a very safe way.

Now my company has about 15,000 deals under our belts so I think I can safely say it works.Start small - spend a few hundred dollars on a property - learn how it all works - and build an empire!

Not big money, but with very little money out of your own pocket, the percentage returns should be astronomical.You haven't said a word about operating expenses as a buy and hold nor rehab costs to get the property to "safe, clean and livable" (which normally will be well below the cost to make a property marketable for retail sale.)