The market is better in the lower rent ranges as the pool of potential renters is larger there. 

I invest in lower B class properties in a strong market (Nashville) where I can cash flow (NOI even after all set-asides for PM, major repairs, etc) about $300 a month for every $170K home I purchase.

I love @Aaron Mazzrillo and he is a true transaction engineer in the Republic of California.California for terms deals such as lease options and installment sales purchases requires strong knowledge of agency law.The California BRE, bureau of real estate, requires a license to talk to sellers and buyers about buying and selling and leasing residential real estate, unless you are a principal buyer or seller and not assigning.I advise most California investors to do Delayed Sales and Purchase agreements w rights to occupy, losing their earnest money if financing is not successful.

@James ManessAnother option is to open a self-directed solo 401k if you are self-employed and process the transaction and a solo 401k is generally not subject to UDFI. 

Additionally, I like the lower down payment with FHA/THDA, especially if you have 3 other people paying down the note.  

If you are looking at the returns and you are finding sellers that are willing to finance the transaction then you are forgetting about one of the most important metrics...Cash on cash return.

You would then have to get a Letter of Environmental Protection, which will lower the value of your property and raise your insurance rates.Deleading generally costs $3000-$5000 per unit.

Since the investor is taking a loss it needs to be an approved transaction.

Keeping mind we are often dealing with 10's of thousands or 100's of thousand dollar of transaction value, lawsuits can get expensive very quickly. 

They need only spend a few hours time of a lower paid employee to discover a retailer or community owner whose website declares, “Financing Available” to open a case that may earn them thousands, if not hundreds of thousands, of dollars worth of fines.