If the buyer makes the payments on time your credit will not be affected, however, since you are still the owner of the mortgage any late payments or defaults will be tied to your credit score.Rent options, subject to and owner finance are all non-traditional financing types and as such you will need to have the contract written by an attorney. 

However, keep in mind that you will need to be able to cover the loan payments on the heloc and it is your personal residence at risk if you default rather than your investment property. 

We have a lease just like any other rental, although we've never really had anyone default on a payment yet so i unfortunately can't offer any wisdom on that front. 

I'm not a tax expert but I understand 30% is the default withholding tax rate.

If they don't pay the 1st and miss the 2nd, send notice of default and intent to accelerate (i.e., start foreclosure). 

Or, as you said have someone get in there and fix the house so you build up the market value should he decide to default, you indeed be rolling. 

I'm just trying to figure out what is allowed to be in the garage by default, or what could be permitted. 

But yeah, prior liabilities/pending legal action (even that which hasn't been filed yet) will all follow the LLC.Technically, I think the loan docs/DoT would treat a change in 100% ownership of the LLC as an event of default -- would definitely need a review.

If you are taking enough Earnest money upfront, then the best case scenario is that they default, or the deal falls through, right?  

I think @Jay Hinrichs has the right answer - you have done something that's outside the lines, and no one wants to be in the position of holding that project should it come to pass that you default.