Even in "Title Theory" states, where the security instrument is a Deed of Trust the foreclosure can still be judicial.  

RealtyShares was started by a very smart securities attorney.  

@Shannon Trivett The security deposit can be used against unpaid rents and my lease contract specifically states this.

Scary enough that they will always opt for the 'security' of a 9-5 job with a direct deposit of X amount every 14 days. 

It sure increases landlord's security, but on the other hand, it is also a distance you setup between you and tenant.

Hi guys,So I'm incredibly close to locking up my first Owner Finance deal but have questions about approaching my Private Investor for the Rehab costs.Typically I'd say to my investor that they'd be secure by the note on the property but considering the Owner still holds Title in this case, how can I reassure my Investor he can be secured to a point and not in a second lien position.

So yes in my mind your paying a little more for security and piece of mind.. it all depends on your situation..

They have saved up about 5k and I have another 2k in security deposit.

This is due to the fact we have become more experienced, more stable thus reducing his risk, providing quicker turn around cycles and w now have better assets securing the funds.  

That way, when they leave in a few month you can deduct any unpaid rent from their security deposit.