I'm looking at a property, the owner is willing to finance under the condition that he manages it to ensure a positive cash flow.

Why you maximize payments on your most expensive debt - ensure your payments are made on your other debts -- minimum payments are fine.Along with this exercise - make a net worth statement and update it every week.  

I want to ensure that I am understanding the deal correctly.Purchase Price: $140,000Down Payment: 10% ($14,000)Interest Rate: 5%Balloon Payment: "1 year Balloon payment of balance".Rent for area: $1,400 / monthTaxes: $4,000 ($335/month)Questions:1.

Many personal umbrella policies will exclude "business pursuits", so don't assume garnering the policy will ensure you have what you need.

As an example, around our area, it is predominantly occupied by a few big players (seems like @Rob Beland as well).  

My counter argument would be that many people have limited capital to invest with so if they decide to deploy capital, they want to ensure that it will be as much of a "homerun" as possible. 

At worst it unfairly targets communities of color, uses insensitive language and will ensure that, if followed, you are cut off from many of the areas that currently represent some of the best investment opportunities in the city.

However, you're going to want to have a title company or lawyer involved to ensure the title is transferred and recorded properly.  

Also, would you even need all these players on your first deal?

I typically do always ask for closing costs but want to ensure I put in an attractive offer.