I'm considering a rental agreement that states the move-out date in the contract (with option to extend under certain terms), and has them pay the full 2-3 months' rent up front, with a half-month security deposit also due prior to taking residence.

After two years we would have 23x$2000 = 46k and after 3 years, 35x$2000 = 70k.Is there any way to structure a lease purchase agreement so that we can approach lenders in 24 months and get a 620k mortgage for a 690k home with a 70k down payment (10%).

Typically all of the apartments I manage are non smokers so I would suggest making sure that there is a clause in your rental agreement for non smokers.

Unfortunately, the seller of a property and I were unable to come to an agreement and she has chosen to let her property get foreclosed on Monday.

@Robert Herrera, and all, it was a standard "Lease/Purchase Agreement".  

Do you already have a signed agreement between your agent and your investment group?  

Most mortgages require you to use the home as your principal residence, and if you rent it out, it's technically a breach of the agreement that would allow the bank to accelerate and call the full amount of the note due.

Essentially you are buying the business from him, as long as there is nothing in writing that states that if he sells the business that agreement becomes null and void, you should be fine with it. have a lawyer check over any agreements on that before you purchase it.

In the first instance, you simple need a partnership agreement (or a company) with you as the operating/general partner to make it official.In the latter case, you may find yourself in the realm of securities regulation which will add much more cost and effort to your fund raising.

And then have a real estate purchase agreement stating 94,000 sales price and earnest money 40,000. or just 1 form  stating the Lease Option.