I know subject-to comes with a due on sale clause and lease option could lead to periods where I'm having to pay cash if I don't have a tenant in (sandwich LO vs wholesale/assign).I need to get a deal under my belt to help me move forward.

.= $78k (balance $66k) Payments current.Monthly payment= $810 (PITI)Repairs= $2KI want to buy Sub2, and then sell via L/O to a tenant buyer willing to put in some work equity.

Just because you can get someone to agree to something doesn't mean you should, like jumping off a bridge or losing thousands of dollars from what you said they'd get.As to the deal, use an earnest money note, consider a L/O as it will probably be the cheapest way to get in with no money.

I'm guessing one of my LO friend can help you find a good Realtor. 

@Jerry Starkey 1st, I never take a deposit on a LO.

Zillow says it's worth fifty bazillion dollars" - there, now you're saying something a typical LO is used to.

I've talked to the neighbors, (got the former owner's entire life story) and I see no real issues cropping up with a motion to quiet the title, so I am going to tell my broker to offer him a L/O on the following terms: 1.)

TX has specific sections of Title 2 CH 5 TPC that apply to a LO longer than 180 days and less than 36 months. 

@Steve Vaughan so that means There has to be cash exchanged to start LO in order to make it legal?

The LO will work too, but it will be harder to get your rehab money back.