If they are participating in the profits and not charging interest, they will be more like a limited partner than a lender. 

But since you mentioned your income I would assume you have a lot of responsibility at your day job.My advice is go conventional, a year and half ago they required a 10% down payment, im not sure what it is now. 

When qualifying for a loan, I’ve heard to go to different mortgage brokers/lenders to compare interest rates.

My question is, if I were to buy a property for 70k with an fha loan ( 2.45k down) spend about 10k in repairs, increase its value to 100,000 would I be able to refinance out of the fha loan to a conventional loan without having to live in it for a year?

Or find someone with a HELOC at 5%... they can draw on the HELOC @ 5%, charge you 12% and 3 points, and make that  spread as profit. 

We have conventional loan and honestly this is the first time I have seen anything like this before.  

In fact, I would recommend these approaches over the conventional purchases with a downpayment and a mortgage. 

I know I can report the agents to TREC but... isn't that like putting the cat in charge of the mice?

3) Is there a usual or standard amount/percentage for the Option Fee, rent credits, and any other fees/charges?

Contractors tend to charge more if you pick a lot of colors.Just a thought.