I understand it's a different ball game, but want to possibly get some experience under some more experienced investors in that area of expertise before going in with a couple other smaller investors on a deal of our own.

He exercises common sense: he wants assurances of being paid and some recourse if his payments stop coming.What you're offering him is some flimsy LLC that he would have to go after if he is not paid.

You may want to exercise that right in this case, as the property obviously has significant issues going beyond what the seller will be able to fix within a reasonable timeframe.

My reason for asking, though, was to simply make sure you go through the thought exercise. 

If you want to credit them something, in the contract you both enter into when they want to exercise their option and purchase, you may opt to give them the amount of the option payment as a credit towards the purchase price. 

Hi BP,Recently I fell out of my routine of eating healthy, exercising, reading ,etc (essentially dropped a lot of my good habits).

My father-in-law is the contractor for the new build, and with the discount he's giving us, we'll end up with over $100K equity in the new home after it's all said and done - I plan on using the new equity to finally get the ball rolling.I'll need to keep my 9-5 for a few years, but I hope to eventually make enough in rental income that I can stay home with our kids.

And not all LPs are good and I've seen them exercise control provisions when other groups might not have. 

You are looking at an NOI of 37,500 ball park. 

As a general principle, your seller or broker should absolutely get the ball rolling on a service transfer for you.