My realtor (and friend) owns a number of properties and recently offered to sell one to me through a lease purchase agreement.

You are offering less than market value and then selling that contract at a higher value.

@Dominick Tonnarini, The only issue with your plan is that you will have to pay a sizable tax on the sale of that property when you do sell. 

You can get higher but the rates will be higher as well and it will be a lender that doesn't sell the loan to Fannie. 

I've had clients pick up a half dozen homes without ever putting more than 5% or 10% down or selling any of them.

FYI: If I keep I will be sidelined for 8-12 months until I can buy another deal.What you guys think Keep a fully renovate home for 66k in a C+/B- area or sell for 107k for the next deal?

My personal opinion is that unless there is no other way to sell the house, subject to should only be used when BOTH parties are sophisticated investors.  

Or should I sell and jump start my real estate acquisitions?

Signing it knowingly and selling their short sale property to a family member is Mortgage Fraud.

Just remember if you sell it, make it your primary again by living in it for 2 years, or buy a new property using a 1031 to avoid capital gains.