You have to borrow your equity and then make payments on it.

Initially they said they would make payments to me and crap like they have millions in assets, just no liquid assets. 

As far as SingleKey actually paying out on claims for tenant non-payment up to 12 months, property damages up to $10k reimbursed, covering 30 days of vacant property losses and helping out with tenant evictions up to $2k (as advertised), curious if anyone on here can attest to SingleKey actually paying out on these claims successfully.

Is refinancing not an option in your mind because of the high pre-payment penalty?

My budget for my first property would be somewhere from 50-80k as a down payment.

Here are some general guidelines: Lien Position1st Position LienEquityMinimum Down Payment of 20-25% (a 30% equity to sale price is preferred)Down Payment made in certified funds and not borrowedMaximum Funding of 70% ITV (Investment to Value)SeasoningMinimum of two monthly payments already made12 months or more preferredPayer CreditCredit Score of 650 or higherNo major derogatory trade lines (No 90-180+ days delinquent, foreclosure, repossession, bankruptcy, etc.)No decline in credit since purchase of businessTermsPrefer 60 months or lessMaximum of 72 monthsNo Balloon Payment preferredCash FlowBusiness has positive cash flow1.25 debt service coverage ratio preferred.DocumentationPersonal guarantee from a creditworthy individualStandard documents including Note, Security Agreement, and UCC-1 filing.Tax Returns on the business that substantiate profit and loss statements.OtherPayment history current and verifiablePayer Interview indicating buyer is satisfied with business and comfortable making paymentsMotivation for selling the note is not a result of a deteriorating businessConsideration of high risk businesses or geographic areasIn these situations, sometimes a partial is a better option. 

Be aware if their payment is clearly labeled "for rent only" or similar, and in that case, only apply it to rent. 

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?

Now to the bad news: it is REALLY hard to be a 20yo real estate agent and make a living wage, let alone generate cash for a down payment.

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.