I agree that until we know true numbers, it's just a math exercise, but I'm appreciative of all the great advice.

And while it's true that if the buyer couldn't get a loan and was unable to exercise the option the rehabber would keep the option fee, that also would result in potential lost opportunities for the rehabber/seller (other potential buyers, possibly even willing to pay more), all while they continue to pay holding costs.

Or get an option agreement and then assign the option or don't exercise it.

I have a BS in Exercise Physiology and certifications through the American College of Sports Medicine (ACSM) as an Exercise Physiologist as well as Group Exercise Instructor.

You need to exercise patience and let them know you are here to help.

You should go physically inspect all of the big ticket items associated with the house (roof, water heater, a/c, etc).  7.5% is well and good for spreadsheet exercises but if the roof needs to be replaced yesterday, that's immediate capex that you're going to get hit with that you should add to the outlay cost. 

So the numbers are real numbers on the first 8 and they are projected on the last 8 (but my projections have been pretty accurate to what the real numbers would be so I included them).My portion of the monthly cash flow created is 2064.74 plus 1340.82 (until I sell all of the second performing notes) so it is $3405.56 per month with about $152,358 invested which is about a 27% cash on cash return.All of these properties are on 5-year lease options which means that if all of the tenants exercise their option at the end of the 5 years (which statistically I know won’t happen, but if it does) I stand to have profited $665,800.84 among all 16 properties (this doesn’t include any profits that come to me from the second position notes that I am selling on some of these properties).

Appreciate the detailed comments, even if I don’t get the house, just going through this exercise is helping me think more critically about these investments. 

Ask the local fire department if they want to use it in fire exercises.

Rinse and repeatAfter 4-6 weeks of doing this exercise you will have built relationships in the community, understand the highs & lows of the job, what it takes to be success and how to get started (ask how they started).