I have the opportunity to get into a lease option for a property that I'd ultimately like to buy & hold, but I'm trying to figure out the rehab financing.

I would love to buy one to keep and completely renovate it and lease out to a business or possibly run the business myself.

Our plan is to do that, live in the renovated unit until the tenant’s lease downstairs is up in February.

. - This is why I like @Brandon Turner's approach where he talks about being able to blame the lease and the law.

Greg:    First, do not get discouraged by anyone, someone else is doing it so you can, not going to be easy.If not done already I suggest to look into this:Enforce that PM uses a great website for rental screening, ones with a background check and choose the best tenants possible.Review you leases to close any pitfalls and enforce the lease to the T.Keep the units in good shape and keep extra cash reserves ( fixing + trip expenses )Tiger than normal lookup on the PM ( have second PM line up ), vacancies, unit showing costs, repairs, fees, etc,  require a once a week normal operations report and a once a month full operations report.Family, friend on virtual assistant that regularly drive by the property and reports to you, or if cash flow allows and deem beneficial you can install security cameras and remote view activity on the property, nowadays there are lots of options.Check if feasible to get a home warranty plan for the units so some pain issues are self-managed by the tenant via a phone call to the warranting companyIn which city/state is the property? 

I was looking to lease option it out.

Write clear, understandable leases with landlord provisions that you stick to, don't be an arrogant jerk flaunting your economic success, communicate often and humbly, reserve judgment when you can.

We kind of shrugged it off because this is par for the course at times and we are going to be replacing locks.It wasn’t until we started contacting tenants and plugging in the info from the leases into our system did we realize how chaotic things really are.

@David Montore if your sister doesn't want to deal with any more 'scummy' tenants, why would she want the deeper, longer-lasting potential complications of a lease w option, or a seller wrap, or contract for deed (land contract)? 

Have you seen the lease agreements?