I put $$$ and sweat into the property and pay existing payments ($350/mo) We then discussed my company painting the exterior (aprox $5K value) and this would be considered the down payment.

That's a big hurdle for many would-be investors so don't let your momentum fade.On the "program" front, I wouldn't sweat it too much.

From what I understand, any sweat equity can be a problem, because you are using your own expertise and work to benefit the retirement fund.  

If not, don't sweat it, but find another lender for future deals!

I am considering updating the townhouse, cosmetically, investing some cash (about $5K to play with) and a lot of sweat equity over the next 9 months, to see if I could get the value up closer to $200K, and then buy/sell and have some money for a step up. 

We use two strategies to acquire properties. 1) buy a good rental as a primary and rent it out when we leave (we prefer houses with lots of sweat equity).

I am extremely handy and do a lot of home improvement projects as a hobby - building furniture, installing fixtures/appliances, fixing things - so I'm willing to work with contractors as well as invest a lot of sweat equity into a property.

There are still some good cash flowing properties in the LV if you look hard enough and are willing to put in some sweat equity.  

I guess I always like to see the blood, sweat, and tears from the newbies.

Having rented my first land in 1940, bought my first property in 1957, partnered in buying 484 single family units in 1968 (Trading sweat equity for almost $1.5-Million in profits) and being engaged in REI continuously since --- I have nevertheless invested in about a dozen training programs during the last 15 years.