Either way, just changing how title is held is usually not a problem, as long as the beneficial owners are not changing. 

I want to make sure we do not have the same problem as the previous owners.

You should transfer the title to your LLC with a warranty deed (or possibly a special warranty deed if there is still a mortgage).If later on there is an issue with the title (that would be anterior to your initial purchase anyway), your LLC will "sue" you for the title problem, as you gave a warranty that the title was clear.You in turn, will be able to go back to your title insurance to correct the defect that was anterior to your purchase, as you were basing your warranty on the initial title search done by your title company.If instead you use a quit claim deed, your LLC has no recourse, unless your LLC bought a brand new title insurance with a title search.

., I don't think its as big of a problem as it sounds like. 

The 5 times it failed, the place was vacant and I found the problem a day or two later.

It's a complicated issue, but it's highly unlikely to be your problem, as Steven already said, because partners' basis in the partnership is increased by debt assumed by the partnership (unlike what happens in S-corporations.) 

I am guessing that you have an area problem as described by a couple of people above.

I do not believe the negative cash flow will be a problem, as I should have around 6-10 months of cash reserves! 

A lease option on the other hand consists of two separate agreements, a lease (no problem), and an option to purchase at some point in the future (no problem). A

So that's not nearly as much of a problem as finding a way to lock up the new property but not let him take title to it before he completes the sale of his old property.