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. 

It seems like this is the sort of rejection i’m seeing from NOT and NODHomeowner has just been saving their mortgage pmts and is working out a loan mod/other solution Family or other people are helping to pay so it will be taken care ofWorking out a loan mod or have already gone through that process and secured itNot interestedI try to stay there as long as I can and portray that I’m looking for solutions.

Purchase price is 489,000.Riskier option: $489,000 loan amount (30-yr 10/1 ARM @ 3.25% initial rate) (100% of purchase price)$0 down payment$3020 closing costs (12,800 - seller contribution of 2% of purchase price)$100k variable rate loan at 3.6% (100% secured by cash already in account w/ lender).