Insightful :PTo original poster, 20k is fine to buy a low balance performing note.

Owners have a refi on the property of $51k in balance still due.

As to a balloon payment here is what that basically means: you pay x dollars for x years and at a specified time any remaining balance is due in full as a single payment.

You're actually look at a seller financed "wrap mtg", which is a form of sub2, with the seller carrying the balance.  

The balance today would be 45,337.41 or very close to it.

However, you have to be careful of the senior lien holder asking for unpaid principle+interest+penalty fees; sometimes this can be far higher than the face value of the outstanding principal balance.

Following is how the ROBS 401k works: Because you directly rollover your IRA or former employer 401k, 403b, Keogh, SEP, SIMPLE, or other eligible account, to your new ROBS 401k  plan, which then funds your business, you incur no taxes or early distribution penalties.Unlike traditional 401k plans that allow for a 401k participant loan, that is, borrow up to 50% of the account balance not to exceed $50,000, the ROBS 401k for business financing plan allows you to use all of your retirement funds to fund your start-up business.The ROBS 401k funded corporation allows you to draw a reasonable salary from the business.ERISA 408(e), and ERISA Reg. 2550.408 list information regarding the use of 401k funds to invest in employer stock of the employer’s corporation.The IRS formally commented on the use of 401k business funds on Oct 1, 2008 by issuing IRS memo commenting that the use of retirement funds is not disallowed but continue to be reviewed by the IRS.The use of retirement funds for business funding entails the 401k purchasing stock shares in a C-Corporation.

I can even see how the properties would surpass my 401K balance in a decade pretty easily. 

@Amber TurnerThen you have the choice of going Freddie, or Fannie, whichever is more advantageous, if needed.Reminder that retirement accounts can be used for reserves, at 60% of value.Below is particular to your situation as you described it...Fannie:4% of unpaid principal balance for non-subject property investment properties.6 months of PITI for subject property. 

Another way to structure it is go ahead and do the Contract for Deed but put a Mortgage Clause in the contract stating you have the right to finance the property as long as the balance due does not exceed the amount owed by the purchaser.