The 5% of the remaining balance late payment fee is a little much IMO. 

Although I've considered a future line of credit against the property as my best long term option, I would need to pay down the remaining balance first.

Miami Rental Market Update: Rents Drop $200 as Affordability Remains a ChallengeMiami has officially ranked as the second-most unaffordable city in the U.S., but there’s some good news for renters: local rents have dropped to a 3-year low, with decreases of up to $200.

Balloon Payment:• At the end of 24 months, the buyer will make a balloon payment for 50% of the remaining balance of the loan.• This balloon payment will be paid through a cash-out refinance of an investment property valued at $198,000.7.

With that said, I've done some research on the market and found the following information helpful in my considerations for Phoenix that you might find helpful as well:  Demand for both buying and renting property remains high due to the city's strong economy and growing population. 

Remaining balance is 1.2M payable for 4.5 years @ 8.5% interest, 20k minimum.

If I were to approach a seller of a $200k home, and they had a remaining mortgage of $100k, could I get a new bank financed loan for that $100k, and have the seller finance the remaining $100k of equity to me?   

Their plan is to raise rents (on the poor remaining souls, improve infrastructure and exert some sweat equity. 

If you decide to sell, you will only have paid a little more in interest over the remaining time that you are in your home.   

He is looking at a group of investors like myself to bring 25% of the project value and then procure a bank loan for the remaining 75%.