I would list them as Rent to Own (more people understand that language then lease option).

What questions should I be asking the insurance agent to understand what they are offering and what to add / remove from the policy?

Brighton Park, Archer Heights, and West Elsdon are solid neighborhoods.

Purchase price: $204,000 Cash invested: $50,000 1300 Sq ft 3 bedroom 2 bath with an large 2 car garage sitting on a solid acre of land in Clayton NC.

I understand that anyone over the age of 18 should be listed on the lease regardless.  

$130,000 for an accident is a pretty solid "accident" to say the least

Obviously I plan on increasing his rent to market value and switching utilities but hesitate increasing it past 20% due to the fact that during our walkthrough he seems like a solid tenant with a very well kept unit and even bought his own washer and dryers in the unit. 

Understandably, taking a loan sub2 is not illegal.

But we don't want to be mistaken on our understanding or create the incorrect entity to get the benefits that we want.

The latter is good to understand how well the people handling the inquiry know the property.4.