Seems funds would be available quicker using a checkbook with this structure. 

You are well structured to use the debt snowball to pay down houses quickly, and appears from what you have written that this would be in keeping with your current strategy.  

Also we rarely do structural changes in the first time home buyer space we work in because budgets dont typically allow. 

Any thoughts on what the ideal way to structure the lease option is since my breakeven is quite far above market?

Depending on your down payment and debt structure, the majority of the cashflow should go to the bank. 

No I have not been in person, and what you are describing is exactly what I'm worried about.I will say that I do have a contractor who I trust to do an honest thorough inspection (I requested several references who all gave positive feedback, and the one property I did ask him to inspect he found a major structural issue and immediately told me not to considering buying it).It seems like when most people run into trouble its because their estimates of vacancy, maintenance, capex were all too optimistic.

Make sure that your LLC structure is solid, with proper insurance coverage in place, to protect your personal assets from any potential issues related to the rehab or the property itself.

It's still structurally a house, a non-profit just moved desks into bedrooms.

Insurance and the structural inspection and associated repairs resulting from the fallen seaside condos has resulted in huge HOA cost increases.  

I believe that information will help structure my acquisition strategies.