Sub 2 or Lease/Option in Arizona

[Sheryl Griffin]

I'm looking at a property of which will be my primary residence, to buy and hold in AZ, but cannot find the answers for Arizona real estate law anywhere here on BP or online.  Hoping someone here can help.

I am trying to devise a way to take control of this property, fix it up a bit to force its appreciation, then possibly seek a loan or pay it off after 1 - 2 years.  The owner lives in Australia, is tired of landlording and just wants to sell.  

Owner Carry Terms:

• Seller Owes:  95K
• Purchase Price:  120K
• Updates/Repairs:  15k
• ARV: 210K

He will carry for as long as needed - basically a wrap.  It mostly needs updates (flooring, paint, kitchen cabinets), no major rehab.  Unfortunately, he went the old method to a Title Company to do the wrap (we did not do sub2), and they wouldn't touch it (Title Co. reasons:  Due on sale clause, Dodd-Frank, etc).  I've gone to my attorney, but probably won't hear back for a couple days since he's out of town.  I just don't know what the laws in AZ are or where to look.  Owner decided we could maybe do a Lease Option with up to 5 12-month renewals.

I've done Sub2's in New Mexico and Nevada without issue, but not sure what to do with new laws in 2014.

What would be the best route to go here?  Any advice would be sooooo appreciated!!