Can I do a "lease option" on a house I don't own outright?

[Steve S.]

I have an offer on a rental that is more than I paid for it. 

They have offered to pay me $10,000 more than I paid for the house but are only approved for 70% of the price they are offering. 

They offered to give me the 70% check and have me "seller finance" the remainder. I dont want to be in 2nd position for a total stranger. 

As I thought about it, maybe a "LEASE OPTION" is a perfect way to get them in the house and take very good care of it as they would eventually plan to buy the home  

I would close on the house and agree to the lease option at the higher sales price and they would rent from me until they were in the financial position to buy it from me 

Any thoughts on pros / cons?