I am an LO as well and have done a couple of these.

You could go with a LO who dose some Commercial Real Estate deals a year.

Time period is calculated from settlement date.https://www.federalregister.gov/articles/2012/11/29/2012-28918/federal-housing-administration-fha-temporary-waiver-of-fhas-regulation-on-property-flippingAny other requirement is an overlay specific to the lender.Find a LO who works with investors.

To add to your extensive list, I would've contacted more RE agencies to get their expired's and turn them into commissions for them through l/o, attorneys - would have met more BK and probate ones, title co's and mortgage brokers to get their almosts.  

I have sold to a few other investors on L/O as well.My biggest caution to you is don't put more than 3% of the purchase price up for option money. 

. $600(I don't do this for my LO biz, but I would for wholesaling and to get calls)Get signed up with listsource for out of area home owners. $250 or so depending on the #'s.

But I have used a CFO (Contract for Option to Purchase) for many years.I wrote about the CFO here http://www.biggerpockets.com/blogs/3/blog_posts/25788-cfo-and-a-leaseRE: The CFO - The key to this is you use - a lease and - a contract for option to purchaseIt is a landlord tenant relationship with the leaseYou have to finish the lease as a condition for the CFO.The Option is drawn ahead of time and held in escrow for the buyer, and the buyer has a short time to get the mortgage.The Option is not in the possession of the end buyer until the lease is finished (addresses the equitable interest issue).Conclusion:If you are Licensed in California:Do not close LO assignments on the kitchen table with no witnesses or notary.Realize that the courts will always side with the inexperienced Seller or TBer and not you the REIDo close these in the Attorney's office in California with all the disclosures and releases of liability.There are alot of lawsuits in California.

I am wanting to target preforclosures, divorcees and absentee homeowners, I figured those are the people ill have the most luck with when it comes to L/O.

What percentage of sellers/leads will generally be okay with this type of transaction (assuming they are okay with the LO in the first place)?

He did state that he found a bank and after giving all of his paperwork to the LO and ordering an appraisal they then asked for more paperwork that he just did not have.