(But probably not as rent to own to own sellers over price the property since you don't have the property appraised from your lease arrangement, this can also be predatory lending and/or dealing). 

I talk a lot about predatory lending, there is also predatory borrowing, it depends on who brings up the terms, presents the financing arrangement and if such is increases risks to the other party or is not a prudent arrangement.

As a realtor you can arrange short sales, do subject to existing mortgage, if the balance is low enough offer to pay it off and lease purchase back to the owner of Record.  

This arrangement really works well for us and I don't have to spend my time trying to hire and manage multiple people. 

You should admit to her that what you are offering is much the same as if you were a developer yourself, but you are giving her the time necessary to conclude her own desired moving arrangements.

Ask them to send you e-mails when properties are available that are in the radius that you are looking for that have any second living arrangement - MIL, rentable basement, duplex, triplex, quad, say under $200K.  

I suggest for your first property, you find a Realtor to assist with the contract and post contract requirements, this can be done on a flat fee basis since you are finding the property yourself, there are other arrangements too, but it won't cost anything to speak to a Realtor.

Should I just present the most likely option and include a clause in Paragraph 11 allowing me to modify financing arrangements?

Here you will find lots of great info, network and maybe arrange some partnerships.

If an owner in Los Angeles already has an auction date is there a cut off date that they can make arrangements to sell the house themselves?