I give them pointers on how to build credit and over time most are in a position to "refinance" and pay off the Option. 

yes, but it's much more difficult. you're just not going to cash flow after you refinance - you might even be slightly negative. 

@Tiffany Palaskas consider the refinance route as well.

Would you be able to do a cash out refinance and still cash flow?

From there, work with a reliable cash-out refinance partner to continually access your equity, allowing you to keep non-taxable cash on hand for future investments.

Can I refinance my primary residence 30yr conventional loan into an investment loan of some type and have my wife & kids live there while I live in a seperate primary residence (multifamily) to satisfy the 12m occupancy of VA loans?

If you’re planning to hold this property, a HELOC or cash-out refinance might be the way to go, keeping your savings intact.

Here is some key information:Property recently hit the market and has 2 cash offers alreadyThe seller provided a pre-inspection report, which I shared with 2 different lenders, both think it may fail conventional financing due to potential structural and electrical issues (realtor thinks it could pass conventional)Seller has 100% equity but is behind on other payments (not sure of the urgency money is needed)This is my first attempt at an “investment” property so I’m new to thisI see 3 optionsMove forward with an offer using conventional loan pre-qualification-Not as attractive of an offer to the seller-Possibility that appraiser calls out structural/electrical issues that need to be fixed before closing, effectively causing financing to fail- Best terms and fewest loan fees for meUse a rehab style loan such as ChoiceRenovation-Even less attractive than a conventional offer to seller, but less risk of failed financing if appraiser calls out issues-Slightly worse fees and interest rates compared to conventional-Lenders tell me possibly up to 60-90 days closing in some cases, with red-tape for contractor requirements and draw schedules (sounds like the most hoops to jump through during rehab)Use a hard money lender-Most attractive loan option I can give to seller so I can compete-Much higher fees and interest rate for me-need to refinance into a conventional at the end of rehab (not familiar with seasoning periods but I think this is a factor as well)Which option would you do?

Then refinance at 80% and buy a few more and do it again. 

you can use hard money to buy a BRRRR - will still require a down payment - and then refinance.