If you find it hard to buy the software upfront, it does take away some of the initial risks, at a cost later. Some people may go for it - good for them I say.
Agreeing to a 5% royalty is pretty crazy in my opinion. If you're even planning on being able to support just a modest salary for yourself with your game sales, Unity or CryEngine are better deals. The UE license is only worth it if you plan on making less than $15,000 a year.
