Make sure your rent covers all expenses for positive cash flow.

The reason being if you show them those reserves and the deal goes bad, they are gonna come after you for that $ and that will put you in a really bad position.

I saw dealmachine looks cool but the reviews from others here on BP have not been positive so I have stayed away for time being.

Am I in a bad position.

The more time you spend talking about other options and try to build up the negatives, the less time you are spending on what you fell are the positives of your own idea.If you believe that you are onto a great idea using L2P option contracts and forming partnerships where someone else provides 100% of the money while you provide 100% of the real estate-related functions, then start it up and make it work.  

But it sounds like they are just positioning themselves in the middle of your 'deal gone bad' to make some money for themselves.  

However, one of the other REITs I invested in quadrupled in price, and as a whole I’m $150,000 positive.  

You could theoretically structure a deal where you are cash flowing negative, but have an overall positive ROI.

You really have a great position here.If your private money runs out or runs tight, then you can explore other funding options like hard money.

Turn this around into a positive feel for the tenants.