Thanks for reading and commenting. Yes, the borrower is likely to have mediocre credit or not enough money for a traditional down payment. For this you can charge higher interest than the bank, and debt is a different form of investment than equities (which rarely have decent cash flow). The difficulty of foreclosing depends on the state where you live. Texas is much easier than California, for example. Because of the flexibility, this is more popular than you might think. As mentioned, my grandfather paid for much of his retirement by selling plots of land owner financed, and he never had to foreclose even once over decades despite low credit of the buyers.