In this case, you work with a legal services / consulting firm that will help establish an IRA with a custodian like above, but have the IRA itself invest into a specially created LLC entity.  

DISCLAIMER: PLEASE NOTE THAT I AM NOT AN ACCOUNTANT NOR A PROFESSIONAL INVESTMENT ADVISER, AND YOU SHOULD ALWAYS CONSULT A PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISIONS.Can you explain more when you said that investors are seeking 7-8% Cash on Cash returns, and a minimum of 15% IRR? 

If its your first time, hire a consultant who is an expert in this field and who can do all the paper work and board the note for you.

You should consult a local real estate / business attorney.I believe most small investors use an LLC or their IRA to buy notes, but I was also told a few times that an S-corp would be preferable if you're the only member.Whatever you do make sure that it looks professional.

Sell it directly to the lease option person for an assignment fee or have the seller pay me some sort of consultation fee instead?

I truly thought Joe's post about consulting an attorney was a joke at first (and maybe it was), but then the more I thought about it the more I realized that yeah, I supposed if you have a tenant who isn't Christian and you send them a Christmas card, and then you have to evict them later, maybe they could claim discrimination or something based on fair housing laws.

Consult your own tax experts.

You should consult with a CPA on your options to avoid capital gains tax.

I work a 9-5 as a gov't consultant, but want to be in real estate full time.  

Currently freelance and consult with major corporations, start ups and other businesses.