I decided to buy the property from my grandfather using a gift of equity, which allowed me to take over ownership without having to come up with the full down payment and pay for the tax lien and his closing costs.

@Nichole StohlerI find using a SDIRA to be a great tool for passive investments and growing your retirement with less stress than the stock market roller coaster. 

@Dillon ClarkWelcome to BP!

Often, these investors buy bundles (tapes) of defaulted loans at a great discount to the principal balance and then create workout agreements with the borrowers to get the notes to perform.

Instead of moving into another single-family home, consider house hacking a duplex or triplex, this allows you to use low down payment loans (FHA, conventional) and offset your mortgage with rental income, accelerating your path to financial freedom.

Assuming the leases clearly state a security deposit amount, the seller knows that the tenant will be wanting a refund when the lease ends (after closing) so should be an easy reminder that you need those funds credited to you at closing from them to refund to the tenant when needed.If the seller spent the tenants deposit, at least the credit to you at closing comes out of the sales proceeds (seller just nets that much less at closing) and assuming they have sufficient equity should not be a big deal.  

selling notes do not have to get permission from the payor on the note to be legal nor do they have to notify but its common to notify so you know where to send your payment.

It’s not quite as easy as having the liquid cash to invest.

I'm not a wholesaler, but I work with them a ton to source notes and seller finance deals.

Then if you still 100K off, I would start dropping the price in a big way to get to an even playing field.