Generally people do not have agendas and usually keep thier personal belief and views out of things generally.

Personally we just do option 1 or 2, it's easy to explain and understand, and even if option 2 only recoups you 80% of the cost, that's better than 0% or the headache of trying to figure out option 3.Again make sure this is all allowed for your area

But I did implied during an in person conversation, that they'd get their security deposit back, if the apartment was left in good condition.

Now personally I would never have taken a client there without a written agreement between you and me, If you are not paying a buyers agents commission that's fine and your choice.

I personally think 2% is reasonable, especially if he found the deal and did all the work to get it over the finish line.

We also sublet our own personal home that we own. 

Hard money lenders are more interested in the after-repair value (ARV) of the property than your personal finances.- Have some skin in the game.

I've done it twice in Reno, NV and it's changed my life and boosted my net worth significantly. 

Purchase price: $453,000 Cash invested: $80,000 Personal property and first real estate deal I did as a realtor

I'd personally pass on this deal, the return on investment (ROI) wouldn't be high enough in my opinion.