I have bought a number of homes with seller financing. It is more difficult now, but it can be done.
The key is to understand what the seller really wants vs. what he says he wants. "Cash" is not always the answer. Look for seller's who want a secure income stream rather than cash. The seller may be in a situation that a cash sale would have unfavorable tax consequences or he may simple prefer a reliable check in the mail each month. The seller may not articulate what it is that he really wants. You have to listen between the lines. Once you know what the seller really wants, you have to structure an offer that will give him that.
Then you have to be able to state clearly why he can trust his equity to you. There are plenty of reasons other than bad credit that call for seller financing. For instance, medical professionals often have high start up costs when they open an office. Their prospects may be strong, but the immediate circumstance may prevent them from obtaining a mortgage. Short term seller financing may be just the ticket in such a case.
Obviously, "No" is seller's first line of defense. If you expect to buy property with seller financing, you must be able to structure an offer that protects the seller's equity in the property and you must be able to clearly communicate how your offer will be safe for him to accept and how the offer will be more advantageous to the seller than his other options. You may offer a higher price for the property than the seller could get other wise, or perhaps a higher interest rate than he could get from his other investment options.
You will also need reliable legal counsel to avoid inadvertently breaking the many laws that regulate real estate and financial transactions.
It can be done, but it is not simple. The best place to start is your local library. Read everything you can find about how transactions can be structured. You will have to become an expert on the possibilities.
Then find competent legal and accounting professionals who understand what you want to do. Don't expect real estate agents to be jumping up and down to help you find seller financing. If you find an agent who fully understands the process, pay him well because he is rare.
By the way, beware of the "gurus" who pitch real estate on late night television. Also watch out for the "investor clubs" where everyone brags about how they are buying property after property with no cash of their own.
Be especially wary of "subject to", "contract for deed", "wrap-around", and "lease to own" agreements. Don't even consider entering into them without competent legal counsel.
Be very clear about what you really want and what you have to offer in exchange for what you want. There is always a price to be paid. If you are not clear on what you want and why you want it, you may find that you are paying a much higher price than you bargained for.
Don't expect this to be an easy task. After all, if it were easy, everyone would be doing it. The fact that most transactions do not involve seller financing tells you something!