The note was set up so that I have the option to refi and pay back the loan prior to the 2 year balloon, however the lender must receive at least 1 years worth of accrued interest.

I'm really looking forward to getting started as soon as possible but I've set a goal for owning my first investment property by the end of 2019. 

How do I set up terms with the individual to get him a good return and still make a good return myself?    

Why are you setting up the LLC's?

Just looking for introduction and possibly set up with auto-emails.

well this is pretty standard for todays day and age syndicated multi family deal.I think the only issue maybe the refi is not as appealing in a few years with higher rates.. however as stated pretty common set up and common terms. 

You should be working on both sets of relationships concurrently... then whenever financing that property you get under contract comes up, you make a choice.

Now that you've gone through this, have you set up any procedures prior to buying the property to avoid this?

If our rents were set so that the median house hold in that area could qualify, our rent would be $1180/month. 

The home is in a rural setting and is heated primarily with a wood stove in the basement and electric baseboard.