I'm still honing in on renovation costs, etc. to make sure this is accurate... but in these scenarios would it make more sense to do a "flip" and exit immediately rather than buy & hold?

Offer to pay for his entity creation and a review of his taxes by an accountant instead of Turbo Tax that he must be using, because I'm unaware of any scenario where it makes sense to avoid making money due to fear of taxes - in exchange for granting you the lease option and covering those expenses could be your option fee.Rral Estate is a tax shelter...

Tell the seller you are serious and need to do your homework, if you sense any reluctance simply walk away.

I am with @Jeff Filali on this one... his math formula indeed makes sense  (heck if you want to see real life documentary how I am executing his formula in real life simply visit my blog).. 

That makes sense. 

Essentially the bank and FHA is trying to make sure that it make sense. e.g.

You need to clearly define your short and long term goals, before assessing if it makes sense to place your money into it.

I don’t mind the distance because the numbers make sense.

Makes sense.

It’s common sense.