Is this crazy? Or illegal?

[Jared Vidales]

Midnight thoughts here, so please forgive me if this is crazy talk--

I'm currently flipping in a low income area, roughly 80% Hispanic demographic. Our buyers for our projects have no credit, and most of the time, no social security #. However, they do have 20-30k mattress money to put down on a house, and they typically finance the remainder through a private money source, 12-year @ 14.5%. Pretty crazy terms if you ask me, but they have no choice. Also keep in mind these houses range from 80-130k. 

So i was thinking...there's a conventional loan program available to me that only requires 3% down, and I can finance the remaining 97% over 30-years @ 3.7%.

Would it be crazy for me to pick up a property, and seller finance the property to one of these Hispanic buyers @ 20% down, financed 15-year @ 10%? I can make an immediate COC return, and cash flow the property over those 15-years, and have ZERO property maintenance. Sounds ideal right? Is it legal?

@michael