You could also use a Fannie May Home style renovation loan which a conventional loan and require 5% down vs.

The answer will form around what work you are doing that requires permits.  

Only entertain this if you feel you can perform.A lease option will require a down payment, more than likely, followed by a balloon payment upon a payoff due date.

A partnership vs. disregarded LLC warrants consideration- you face different reporting requirements, limitations, etc. 

Both what the resulting end product will be AND the capitol investment required. 

I would buy it also for roughly the same price (it will be in good condition but may require some small fixes for a tenant), but it's bigger and has an extra bedroom so it will rent for $1400.I could have also ran this model by assuming that I would get the same type of property as the turnkey, but for $125k and would rent for $1200 as the turnkey would.

Real estate just like stocks and other strategies requires intelligence and a plan.

It's easy to obtain, costs very little, and doesn't require extra, on-going effort to maintain.

There are dozens of check boxes, some of them matter, and Balance Sheet and capital accounts are now required.

No cutsodians required.