Given that the property was worth $390K in its current condition, I saw an opportunity to make the numbers work while keeping my upfront costs low.Instead of increasing my cash offer, I negotiated a $25K down payment with the seller carrying the balance for two years through owner financing.

Since you haven't started the project yet, use this time to network with lenders to see who offers the best terms....seasoning, rate, leverage and pre-payment penalty terms. 

Their insurance has asked me to return the month's payment for the remaining days of their rental (Unfortunately, I did not have a cancellation agreement).I am unsure how to handle this situation, especially since I couldn't fill the majority of the rental dates and had to offer discounts for the days I did manage to book.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

There would be a lease agreement, just no monthly rent payments.

Seller was behind on pay HOA payments and in risk for losing the property.

Down Payment: 20% of the purchase price, equal to $43,0003.

Add-on:  I do like that I can automate my late fees, no partial payments, etc.

Quote from @Theresa Harris: For late payments, how late are they? 

Doing this would allow me to cut my down payments in half.