I understand the emotional element vs. the raw accounting exercise - we should consider both.

What's in it for the mortgage broker- When they exercise the option to purchase they do it through the broker.

The amount of time the tenants have to exercise can kill the deal with any buyer.

If you want to be a bird dog and get a one time finders fee, that's a different story; however, if you are looking to own property with partners, I'd urge you to exercise extreme caution. 

I know... for sake of this exercise I will consider 3-months vacancy rate.

The right is rarely exercised but it can happen. 

The lender can exercise the “due on sale” clause if the name(s) of the buyer are not the same name(s) as the members identified as the owners of the LLC.  

I would guess the biggest reason people do not transfer properties from their personal account to an LLC is the threat of Lender exercising the "Due On Sale" Clause of most loans. 

In 1976, the Board became concerned about the increasing controversy as to the authority of a federal savings and loan association to exercise a "due-on-sale" clause - a contractual provision that permits the lender to declare the entire balance of a loan immediately due and payable if the property securing the loan is sold or otherwise transferred. 2 Specifically, [458 U.S. 141, 146] the Board felt that restrictions on a savings and loan's ability to accelerate a loan upon transfer of the security would have a number of adverse effects: (1) that "the financial security and stability of Federal associations would be endangered if . . . the security property is transferred to a person whose ability to repay the loan and properly maintain the property is inadequate"; (2) that "elimination of the due on sale clause will cause a substantial reduction of the cash flow and net income of Federal associations, and that to offset such losses it is likely that the associations will be forced to charge higher interest rates and loan charges on home loans generally"; and (3) that "elimination of the due on sale clause will restrict and impair the ability of Federal associations to sell their home loans in the secondary mortgage market, by making such loans unsalable or causing them to be sold at reduced prices, thereby reducing the flow of new funds for residential loans, which otherwise would be available." 41 Fed.

She keeps her insurance policy but adds you as an additional insured party.2nd, draft an Option to purchase which identifies the purchase price and length of time you have to exercise said Option.Now you can start improving the property and when you're ready for your 1031, you go ahead and close.