From there every 20 point increment affect pricing differently.

I control the price I buy at (equity gain at the buy), I can force appreciation on my own terms, I get the monthly cashflow, I get direct tax benefits, appreciation and loan paydown that directly affects my net worth since I own the asset.

This way you can refinance out all of your cash and hard money positions.Whether or not it will "cashflow" has nothing to do with BRRRR (except for maybe "repeating"!). 

Me and my girlfriend are currently saving to purchase a home within the next year or so to start house hacking, my concern is how signing the lease option to purchase contract will affect our eligibility for first time home buyer programs? 

As everyone should see from the above posts, investing in real estate, especially foreclosure and tax sales, REQUIRES a working knowledge of legal aspects that can possibly affect the purchase.  

These items add up over time and if your listing is not killing it this could affect ROI.

Check out these two articles that provide a good overview of the factors that affect qualification and loan amounts:DSCR Loans: What Are They And How To Get The Best Termshttps://www.biggerpockets.com/...DSCR Loans: How To Use Pro Strategies To Save More And Make Morehttps://www.biggerpockets.com/...

Sellers or JV partners may value a hands-off partner who can handle rehabs.Start with a Strategy: Whether it's BRRRR (Buy, Rehab, Rent, Refinance, Repeat) or simply flipping properties to build capital, define a clear path for your first few deals that aligns with your long-term development goals. 

So it became a long-term action of repeating that cycle to achieve decent LT tenancy base. 

All the "bad" affects them first.Pref equity has a known capped upside and more downside protection, but as @Lane Kawaoka said, getting paid and/or getting your money back is not a guarantee.