DJ:I'm a little confused about the "leads" part, but anyway I would put in the contract that you have 60-90 days to find a qualified buyer, if not the opportunity comes back to the original owner -or you just don't exercise the contract.

I've certainly learned a lot more about this interesting and storied city than I knew before and that’s the main point of the exercise.

When they exercise it the resulting agreement of purchase and sale will be between the seller and the tenant buyer.

LOLI always ask about parking, w/d hook ups, amenities (pool, club house, exercise room, tennis courts, etc.).

It is unilateral - you have to sell if exercised, but the Optionee does not have to buy. 

Rest assured, I have money options I can exercise to close escrow that would leave me in an uncomfortable position... but I can do it. 

As far as the building guys saying you need to bring the house up to code, in DC, if you open the walls, you'd better be prepared to update the guts of the house, because if the inspector sees a problem, you bet the $40k a year bureaucrat will exercise what little power they have in life.

More from initial option money, rent, and back end exercise price.Warning - if you are broke, don't do sandwiches.Rules of thumb:Pretty houses 85 - 90% LTV, 15 - 10% Equity; Tools to use are leases, lease options, sub2, wraps, land contracts, etc.Pretty houses 0 % LTV, 100% Equity; Installment SalePretty houses alot of equity but some existing financing: Sub2 and a note, lease purchase, seller gets new 1st mortgage and you give sub2 and a noteIf your exit is lease to own, use a RMLO for your buyer.

This means no extra rent applied towards a downpayment (which is financing) as part of the lease and no rent incentives tied to the exercise of the purchase option.you need to ensure your tenant / buyer is capable of affording the house and obtaining a mortgage (from a traditional lender) when/if they exercise the purchase option;the option consideration could be the downpayment (this may no longer be true under Dodd-Frank and/or SAFE act ... best to ask someone like @Bill Gulley) in which case you do not want to make it too large (3 - 5%).  

In addition to the wonderful advice and resources given, I'd like to add that one of the first things you can do (with little to no experience) are answer the following questions (actually put the pen to paper though or else the exercise is moot).1.