And this has been quite an eye opener exercise.  

The buyer had no problem with an assignment fee of 3.5%-5% as long as it also counted toward their downpayment (if and when they exercised their option).  

My experience is that becoming an agent is an exercise in money going out the door for a good bit.  

Once you go through the pro-forma exercise a few times in excel it gets pretty easy. 

However in scenario two.. one needs to exercise normal home buying protocol.. just like you were buying a home in LA to live in.. you would and or your agent would request the normal inspections for you.

More importantly, the seller needs to KNOW (in writing, signed by the seller in front of an attorney, in my opinion) that the due on sale clause has a potential of being exercised by the bank.

It was actually just exercising an option to buy from last year. 

For example, if in the 30th month I decide to exercise my option to purchase the property, the purchase price would be $180,000 less 50% of the previous 29 monthly payments at $1500 (29 payments x $1500 x .50 = $21,750). $180,000 - $21,750 = the new purchase price of $158,250.

You guys agree to a pre determined purchase price and you get something like a six month option to exercise it at that price or conditional upon his moving out.

That allows you to get out of the deal by exercising your financing contingency.If you're just trying to assign your deal with out doing any fix-up, than the idea is to sell it before you have to close and come up with funds.