I'm just securing the actual real estate for the deal w/ conv financing and I'm getting a 5yr NNN Lease w/ Purchase Option for my efforts. 

I'm a retired 72 year old operations manager...who has more bills to pay than retirement social security income....can't find decent work....friends told me to try real estate investing....don't know anything about it but willing to learn......I'm a country person not a city person.

Moreover, I need to pay 5K above LP to secure this property and with my very first deal, I'm not getting the warm and fuzzy feeling.

This ROI is less than I generally like to secure, but the timing of things makes this purchase beneficial in a number of ways. 

Carl,Just because he says he's not selling securities doesn't mean it's true.

Or should I just take it out of their security deposit?

A signed lease within 2 weeks with the remaining security deposit due at that time.

He used his security for his last month's rent. 

Some of the better forces in Congress are working to raise the cap under Title III to $5M:To amend provisions in the securities laws relating to regulation crowdfunding to raise the dollar amount limit and to clarify certain requirements and exclusions for funding portals established by such ActLet's hope this happens.  

https://www.biggerpockets.com/flip-analysisYou may find traditional financing difficult to secure on such a small loan amount, especially if the property is distressed.