So I’m a vote against for the reasons I outlined.

Your contract with the management company should indicate whether they have the right to sign leases on your behalf, they don't always, it can be a limited agency-the scope of which will be outlined in writing.

I am trying to figure out what the best thing to do for a friend is in the situation outlined below:Home Value $570kowed 1st mort $496k (current loan was modified and principal reduction completed for $100k reallocated in form of balloon payment at end of loan term)no 2ndarrears $30kIn process of going through bankruptcy, however, want to complete a lease with option to buy. 

You can do a refi loan or a cash out line of credit. 

I am simply looking to advice I have a previous post where I outlined some of the details there. 

Could you outline your process of determining whether the property was worth investing in as a small-town purchase?

I will outline some of the regulations and hoops we had to jump through while completing this project.

If it is looking for historical appreciation data, etc, look at real estate resources that outline historic average appreciation, etc.

Your paper numbers will be higher with these properties like you outlined but you will earn every penny managing them and you just hope your paper returns are close to the returns you get in real life. 

It sounds like the prospective Tenant Buyer lacks credit and sufficient income, Not a good combination.The way to put together a successful Lease Option (rent to own) with Tenant Buyers is outlined here:https://www.biggerpockets.com/forums/600/topics/58...