The best thing you can do is go through the exercise of a developers costs and exit strategy, target what they want to make on the deal, and then back out their profits to see where you need to price it.

Try a simple exercise with him of listing all the financial considerations and purchase/management activities that you can anticipate today - who will do what, who contributes what - consider putting all this in writing in some sort of operating agreement. 

That should come from the why.If you have not already done so read Anthony Robbins awaken the giant within and do the written exercises in the book . 

My biggest concern was the "Due on Sale Clause" but I have had an off the record discussion with my mortgage banker and he put my worries to ease (along with all the other threads that say the clause is never exercised).

However, when you dig deeper, or speak with local turnkey providers or real estate agents in Memphis or other cities, it becomes more of an exercise in seeking out which areas to AVOID and which areas are really able to provide a safe haven for your investments, and more importantly, peace of mind. 

Example external storage area conveniently located where it can be converted to a walk in closet as a later time.Part of the exercise is knowing the various regulations. 

Just best practices exercised consistently and persistently.

It's an opportunity cost exercise.

I would give them at least 2 years to exercise the Option.I know I'll have to pay the capital gains taxes the year they exercise the Option (or could I do another 1031?)

If you are afraid to exercise your rights or fear your tenants take a witness with you to protect your rights.Tenants that are given legal notice can not legally bar entrance by a landlord and do not need to be present for the landlord to enter.