The main issue I have is contemplating the baloon payment at the end of the 2nd year and refinancing the remainder with a bank...how can I compute that into calculating the IRR?

However I mainly wanted to ask about getting housing leases from traveling nurses.I currently have a 5 bed 2 bath, 1920 sqft home in a great neighborhood located less than 1.5 miles from 2 large hospitals here outside of Richmond.

Should we stay away or is there reason to consider? 

The main issue is your exit is capped so if your costs go up, your profit goes down.

My managment company has made more than a reasonable amount of attempts to get the HOA to have this repaired. 

With most products their is a place where this makes sense, but in my experience there is only 1 with this product Right Way = Pretty low credit score and cannot qualify for a traditional loan to access the equity and you need the cash fast Wrong Way = Any other reason than the above. 

Are saying it's a better idea of figuring out and going after a specific niche or group of people who have a reason to downsize or need a different type of home?

@Tarun Kumar there are 3 main types of real estate investing:1) Wholesaling2) Fix & Flip3) LandlordingWhich one are you interested in?

For similar reasons you mentioned with access to both I70 and I90 pretty easily as well as being in range for the eastern sea board makes it a logistics hub.  

Non-passive to achieve this level of return.Add the addition of the ADU makes the main unit rent controlled if over 15 years old.the work to add an ADU likely exceeds the effort of a brrrr that can achieve infinite return  Experienced investors are adding multiple ADUs by leveraging items like bonus density, committing units to affordable housing, etc.