To sum up the risks to the seller; the seller remains liable on a note which is secured by real estate they no longer own; the property sale has violated the due on sale clause of the mortgage or deed of trust and the note can be accelerated by the lender; the seller’s credit capacity is impaired because he has debt with no offsetting property equity.  

Are they credit-worthy?

Seller financing does not always sell for more money and if there are big price declines then you may end up having to forecloseMy recommendation is to sell it with borrower getting traditional financing and put that $ in a tax friendlier account than loan interest = ordinary income rates

I live abroad in Bermuda and I'm currently unable to buy property there due to restrictions and transaction taxes.

My wife and I started saving and building our credit a year and a half ago after talking to a lender to figure out our trajectory to buying our first property.With our credit score in the high 700s and our savings just over 35K we reached back out to our lender and got a rough estimate of where we stood as far as borrowing power.

The mortgages and closing expense can be written off to eliminate the taxes as you want 

I know the question doesn't involve tax bracket, age etc. 

Tax deductible improvements such as drainage tile, terracing, irrigation can significantly improve the productivity and the value of the land.

If I did not report expense for my 2023 tax, how would I write off my huge expense (~20K) for my future profit then?

I am paying off a small LOC and 0% credit cards from the last property - this will take a few months.