Early on, it was a test of faith, but having my back against the wall has been a great motivator.    

I know 3 ways to wholesale without entering into contracts in bad faith, lying to owners, deceiving and getting into the practice of real estate without a license, which is basically what this whole crowd is following. 

They have an interesting background (both college educated entrepreneurial musicians) and actually went to a college where I grew up that I'm familiar with and know some graduates from (and think good things about etc) - We have agreed to a lease of $1550, and in good faith/principle, we have agreed to them having a purchase option kick in under a separate agreement after 6 months of a traditional lease. 

I wouldn't put much faith in this story.  

I think you need to show "good faith" to anyone in the future who may question the transaction, that means "some money went to the seller") Personally I would pay cash, pay off the underlying note and arrears and property taxes, see to it that the seller gets a "reasonable" amount of cash, make the seller move from the property and use an escrow company to close.

I suspect bad faith on his part if I don’t take action.

In most states, the Landlord has a responsibility to make a "good faith effort" to rent the unit so the old Tenant can be released.

He acknowledges receipt of the Pay or Quit notice, and swears (again) he will have payment in full for me by Thursday, which is the final day he has.Obviously I have very little faith that this money is going to appear.

But the reality is different than acting like these people are NOT knowingly violating their contract, trying to blackmail their landlord and didn't negotiate in good faith originally. 

This agreement shall automatically renew for successive terms of 1 year each unless either party gives the other party written notice of its desire to terminate this agreement at least 60 days prior to the conclusion of any such renewal term, in which case this agreement shall terminate at the conclusion of such term" this does not account for any other breach of the agreement which could serve as grounds for terminating the agreement (i.e. performance, good faith, etc.).