The catch is the terms.I'll repay the $85K over 5 years with just a one-time $10K payment this year, 2025 - 2028 it'll be a one time payment of $9,600 each year and in 2029 a balloon payment of $45,600.00. 

Good catch!

I'm thinking that by doing so, after two years of owning the property, the rent growth in the area catches up to where we are at least breaking even.

In some states they are preferred if borrower goes into default, but many states are now catching up and passing laws that you have to foreclose on them which makes them worse than a mortgage because you have to foreclose but also it may take longer and you are also responsible for liens/violations on the property. 

Plus, I would imagine they will be BROKE when the IRS catches up to them.

REALISTIC ARV : $1,850,000The catch: Needs $450k in work.

I am not good enough with electrical and roofing to catch what my inspector has called out in the past. 

You said a “little” money, so bear in mind if you transfer that into a self directed account the annual contribution limits are $7k plus $1000 catch up over 50 so it may take a while to get it to a point where you have enough to invest in real estate.  

Now I haven't studied for the entire 2 years, life tends to catch up and I get pulled away for bits of time, but I always come back to the books and looking up forums and posts from people.

And there is plenty of duplex's out there listed for "fishing expeditions" to catch an ignorant buyer, but happy to hold hence long list times.