They pay their bills on time and make good tenants.

Run by Dutch Mendenhall and Amy Vaughn, they solicit hard money loans (which they do not pay back) and joint venture real estate deals which they also do not pay back. 

Quote from @Mario MoralesMorales: what if he got a HELOC, used the funds to get a property, then cashout-refi the new property and pay off the heloc?

If so, they can sell within 2 years and not pay capital gains taxes on the sell of the home.They could take that money and buy multiple rental homes in other areas if they wanted, or use the money to downsize in to a different home while still having money left over.

Do I really have to pay 8% of the security deposit to the PM? 

Unless you have a Roth, you can easily pay much more in taxes by investing in real estate through an SDIRA.

I’m open to paying the $20K to bring the mortgage current, but I want to ensure my position is protected.If the deal falls through, how can I secure my $20K so I’m not left out of pocket?

Anyone over 18 fills out has to furnish their social security and driver's license numbers, and pays a fee for a credit / background check.

Someone who is paying $900/mo to rent a 3 br apartment is given an  opportunity to pay $700-$800 mo with prospect of owning the house, if they never default.

I don't believe in marriage so I ain't paying no engagement fee.