3) what’s the plan if they spend that $3,500 and a month later another $2,000 bill comes up?

She knows the plan and she is in control.  

If you are planning on buying a turnkey property anyway, I suppose it could provide some insight into the locations they are working in and as I said above, if you did buy a property through them...the academy fee is refunded.Definitely don't take my word for it but it's helped me so far. 

After that I plan to quit my job and become a full time investor flipping properties.

However, if you need fast access to funds or have difficulty qualifying for a HELOC, a hard money loan could be a viable alternative, especially if you have a clear plan to refinance quickly.

The numbers and business plan more than adequately support the project numbers (can share privately). 

Obviously aside from minor material cost savings the biggest reason is to save labor on all of the cutting in, which I feel would likely be moot with 3 sheens.

I would not focus so much on the returns, as I would on the experience of the sponsor and team, location of the property, and overall business plan. 

With The right sellers you are probably catching up back payments and saving them from foreclosure so having a little debt left out there is small compared to having a foreclosure on their credit.

I use Follow Up Boss and just have each lead tagged differently with different action plans