After getting a good amount of equity in the house for future HELOC funding, I was going to move out of it and use the property as a rental utilizing a lease option, or, rent to own agreement. 

If not, then 2 things come to mind:1) you should not give the impression you are associated with BiggerPockets.2) this is advertising/self-promotion that should be in the Classifieds...Thought I'd share that before a Moderator chimes in......My 2 cents,MikeThanks for reaching out Mike.

Without the bank the whole concept is kinda out the window. 

I offered to bring an extra $5k to the table to help the seller out ($290k). 

I just read 5 books (out of print, published between 1979 and 1986) all related to wealth building thru real estate “trading and exchanging” (not for tax free exchange).These were the most convoluted, confusing, and unfocused real estate books I ever read!

Regardless, you could hit up your local REIA and get the word out to local agents and wholesalers and start getting on their buyer lists.

He asked if he could get out of lease, I was a bit furious and told him he would have to find a way to stay 2-3 months, so I would have time to figure this all out and start the new tenant process again.

Or is it possible to have property manager only to help rent out during turn over, once tenant moves in, I can build a local team and manage on my own.

The question I have is, do we sell the house or keep the house and rent it out?

This was a perfect set up as it had a walk out basement/separate unit with 2 beds/1 bath and a kitchenette.