If the lender finds out, they might consider you in default of the terms, and call in the loan, forcing you to immediately sell (probably at a loss) or lose the house.  

Mob creditors had "extralegal methods" of either getting their money paid back or putting the fear into other would-be defaulters (they made sure the press and police could find your body).

If you default on the lease, you could easily end up in a lawsuit situation.

Even though it's been empty and in default a year. 

Meaning I can set up a corporation and buy mobile homes and not be subject to the land rentals if my sale goes into default. 

The promissory note outlines the details of the loan - interest rate, repayment terms, what constitutes default, etc., etc., etc. 

The main thing I see happening is the investors just starting out will immediately get underwater, and any flipping will stop, and loans will default.

. :)So just depends on what you want to do and how aggressive you want to be and what your risk tolerance is.. and then how much time and effort do you want to put into this .as for notes compared to rentals done correctly notes are far more passive simply because you never have to deal with tenants or cap ex or any other things.. risk in notes is you have a default and you have to foreclose. there are some note funds out there were they do the heavy lifting for you.. those can be options. 

In order for it to be fraud he would have to take out the loan, use the cash to finance something else he otherwise wouldn’t have been able to and immediately default on the vehicle.

Both lenders are going to want to be listed in the first position (Put a lien on the note) in the event that you default on your loan.