I am now in my 2nd year of trying to lease out the property and I might have to rent it out for 2000-2200(approaching two months on the market)based on a saturated market, also my PITI has risen to 2320.

Their concept is not new and has been around for ages with people renting rooms in college towns and more expensive markets (NYC, LA) however this is a centralized more hands off management approach to self managing by letting them do all the heavy lifting for you which allows you to scale in less time so yes the concept definitely works and even better with their technology behind it.

Starting with a multi-family home as a primary residence is a smart approach, especially with your goal to go debt-free and save up for that down payment.

Aiming for conventional and not a DSCR loan due to costs and the higher down payment requirement for the latter.With that said, I'm curious to hear your take on what the most cost-effective & efficient approach would be to source a down payment.

One approach we've taken is implementing a move-in and move-out inspection (with photos) to limit wear and tear.

I like the team approach these days get on a team and get paid to learn the bizz.But RE sales is not for everyone thats for sure..

When I came across this property, I approached the seller directly and negotiated a fair price based on the property's condition and potential.

It will be helpful if you get that lease resigned before approaching the bank.  

If we approached him with the $5,000 and had the deed put in our name, could we pay off the mortgage and own the property?

I think if you understand the price per unit as well as the price per square foot in the zip code and nearby zip codes that will give you a good idea of the comparable market analysis approach and appraiser might use.