I am currently in escrow on a triplex using an fha mortgage + a seller carry back (second lien position) Due to strict fha guidelines on 3-4 unit properties...I could only qualify for 517k with 5% down.

FHA has some unreasonably strict standards for inspection.

I figured the advantages of this strategy are as follows:- Obtaining a negative cash flow of a $100 or so a month would be superior return wise than paying about 1000 in rent because I would be able to build equity.

They've been marketing properties in Portugal recently and they've been doing deals in Puerto Rico as well following the same model.Given the comments above, there's not too much I can add.

If I am looking to do the lease option in my market area (Southern California) but the rent does not follow the 1% rule however it does cover the cost of the mortgage is that acceptable?

question for your lawyer...I would ensure the lease is being followed and that there are no history that would lead me. to believe it won't be followed.

It is a Fannie Mae ARM with the first year being X and the remaining term of the loan increasing and becoming fixed by 1% the following year for the remainder of the 30 year loan.

I am applying for a NYS Broker's license and am wondering the following; 1. is it neccesary to fill out the experience/points sections on the application? 

If you haven't already, I would recommend doing the following: Read Brandon Turner's book on Rental Property Investing https://www.amazon.com/Book-Rental-Property-Investing-Passive-ebook/dp/B018UTI2DOListening to the BP Real Estate podcast https://www.biggerpockets.com/podcastListening to the BP money podcast https://www.biggerpockets.com/moneyshowAttend your local REIA meetings to networkStart analyzing deals to get practiceEngage more on the BP forumsAdd a profile pictureAll the best!

I will of course follow the advice of @Nick Mulligan.