He broke it down into what most people estimate, what a handyman would estimate, what a "paper contractor" would estimate (I had never heard that term before), and what a full team contractor would estimate, and the difference was eye-opening.

suggest you start with Dave Ramsey principals ... then move out from there.there is some big huge fallacy  that Real estate is going to let you quit your job and your going to have all this time for the kiddos etc.this will never happen in the short term with rental property.. you build a nice base for retirement in 30 plus years for sure.. but for short term replace your income and have all this free time you need to make transactional income with big hits.. your not going to get their with 200 to 300 a month cash flow on a levered up rental . 

The plan is to rent out the top unit to a long term tenant and for us to live in the middle unit until we move out (if we ever do). 

Hi Daniel,Do you means of collateralizing assets you own for a short term funds like a primary residence or other assets?

So it is definitely a long term play. 

My question is how do I figure how much to offer him in payments for the time period and would I just offer the balloon at the end of the term?

I lived there myself for 4 years, then moved out and converted it to a super-profitable short-term rental (it's ideally situated near great restaurants/nightlife, the National Zoo, Rock Creek Park, and hotels that host professional conferences).

It's a term made up by Pace Morby to do escrows/act as a real estate agent and to circumvent any existing escrow agent fiduciary and legal requirements in closing Subject To Transactions.

It's interesting that even though it never made it to me, but by them sending it to me it is considered "in my possession", because I can't do much in terms of reporting anything stolen.

It could be a good option if you're looking for long-term value growth.