Two of the notes have already matured and I did not receive the balloon payment as the security instrument dictated.

Hey Zach — even though this is an older post, here’s a simple way to think about owner-financing a down payment:Legally, you’ll need a promissory note for the down payment and a security instrument (mortgage or deed of trust) if the payment is significant.The structure can vary: sometimes the seller holds a second note for the down payment, sometimes it’s wrapped into the main loan.Always have these drafted or reviewed by a real estate attorney — it protects both you and the buyer.The key is making sure the payments, interest, and terms are clear so both sides are safe.Owner financing can be a great tool, but the details matter.

My studies have allowed me to gain a strong understanding of traditional investment instruments, but have not exposed me to alternative investment opportunities such as real estate.

I'm about to graduate so I do have a general understanding of types of debt instruments, discount rates, and just about most financial terminology.  

This deed instrument is submitted to the county recorders office for “filing”.  

Very thankful for the closing of this property and to have been instrumental in being a problem solver for the Seller and Buyer!

You'll have to ensure that the contribution is protected through a recorded instrument or lien against the property.   

(I should add that I understand the stock market and other financial instruments quite well from a decade of investing there, yet we are 90% in real estate today) Financial advisors do not understand real estate, nor do they want to talk about it, because there is no commission in it for them.

The spot markets in any investment instrument are the RISKIEST. 

Converting them into primary residences will really benefit you if you're going to hold forever.Another strategy our clients will pursue is sell those properties using 1031 exchanges and purchase passive instruments like NNN commercial properties or Delaware Statutory Trusts which will keep the depreciation recapture deferred.