Exit Strategy for Lease Option Buyer

[Keith W.]

This is a 30 thousand feet overview of the process. Correct me if I"m wrong, then a couple questions at the end.  

1. Motivated Seller has a property in pre-foreclosure
2. We set up a Subject 2 agreement with the seller
3. We pay the arrears to make loan current and pay mortgage going forward
4. Have a Lease Option Tenant with an annual lease that auto-renews (Option expires after 3 years)
5. This rent covers the mortgage plus provides cashflow
6. After 3 year term, Tenant purchases the property at a predetermined price minus downpayment (maybe a portion of rent goes to the principal?)

Questions: 

What would be a fair consideration to pay seller to walk away with? Perhaps a percentage would work here?

How much should we expect the tenant/buyer to pay for the non-refundable "option" payment?

When the tenant is ready to purchase, do they get their financing from a traditional bank? 

Does this mean they have to come up with another downpayment?