I know quite a bit of time has passed since this was posted, but I'd like to know how things turned out on this particular deal.

In particular if it applies to non-owner occupied properties, or raw land, what exactly the guidelines are for the up to 3 seller financed properties per year, etc.  

One tip that I picked up here is while you are starting out and saving money for your investments, start driving / visiting areas you would like to invest in so you get a feel for prices, rents , house conditions etc, and visit and look at lots of homes and open houses so your eye get used to looking at repairs / upgrades that are normal in a particular market.

So, by making it difficult to find assets, you create a barrier to legal actions, particularly the frivolous type.

Good luck, buying a particular note isn't as easy as buying a hammer off the shelf.  

But, it's not steering if the seller of the property requires a particular lender -- the seller is allow to require anything they want (so long as it doesn't violate Fair Housing laws).  

Here are a few things that are important to me (no particular order):The understanding that while you are the property manager you will be managed by meProactive instead of always reactiveTimely financial reporting, timely response to tenant concerns, timely action when tenants break the rules, timely feedback to meBe known and seen by the tenants (do property inspections, find out what is going on before its too late)Be firm but fairHave solid referencesOwn real estate investments (this is very important to me)Expert in fair housing, eviction process, marketing, tenant screening and selection, etc.Have an establish process and vendor pool for a large variety of repairs, be responsive to repair request (doesn't mean all request are granted)Think of it as a partnership (we make money together)Have staff that can step in (can't have a single point of failure)I am sure there are others but this is off the top of my head.

I go with LLC, particularly if you are buying something with more than 5 units, some lenders will require you to form a LLC for that specific project.  

But having said that, I'd still pass on this particular deal. 

We are looking to sell our home and of course, will consult a realtor, but in doing early research, I'm uncertain if I should deduct a particular percentage from the sold prices of similar sized homes.