How to structure Landlord friendly 'Lease to own' contract?

[Bhanu P.]

I recently purchased, rehab, refinanced, leased a SFR. The following is how the numbers look.

Loan of 130K & Appraisal by lender during loan of 174K

I do have around 20K of my money invested in this deal.

I got that property leased for 2 years with $ 1775 being rent for the first year and $ 1800 for the second year. I am having around $480 cash-flow after PITI, HOA, Home Warranty & $130 cash-flow if I also add Vacancy, CapEx and almost break-even if I also add the Property Management expenses.

After running all these numbers, it looks like this is not a good deal at all. Based on the comps, I leased less than the market rent and planning to lease per market after expiration of the current lease, so I may be able to make additional 100-150$ a month.

During the weekend, I get a chance to meet tenant and during the conversation, we both expressed our interest in converting this lease to 'lease to own' option as the tenant is having not so good credit history and like to buy this property after he is able to repair his credit.

I have neither done 'Lease to Own' transaction nor do have knowledge in it. I prefer to go by an attorney to prepare an agreement. But I am not sure on how to structure the terms.

Can you tell me on what are the reasonable terms, duration for this transaction?

Note: Buyer indicated that he can't make any down payment (when he moved in last month, he paid one month rent upfront and paid 2 months security deposit etc and he is claiming that he got no savings).

I can see a value for buyer in this transaction but not so much for me as a Seller unless I structure it such way that it would be 'Win-Win' for both of us.

Questions:
1) If today's market value is 175K, what is reasonable to expect on this property if 'Lease to own' contract duration is 100 months?
2) What happens with existing lease and monthly rent of $1775? I believe this lease will be active on original terms till the purchase price is fully paid and title got changed in to Buyer's name. Thoughts?
3) Do I require to notify this to current mortgage provider?
4) How do my potential future mortgage provider's treat this situation?

I appreciate your input and your thoughts, experience on this is Welcome. Thanks in advance!!!