I'm curious to hear the BP community's thoughts on a novice investor pursuing a subject-to deal when they could qualify for a conventional loan to buy the property, have multiple exit strategies, and have the personal finances to pay off the original note in the case the due on sale clause is exercised.

You can do the same exercise with DEED OF TRUST (document type "D - T" in Wake county) to see SDIRA investors lending... keep the custodian name in the GRANTEE field to find who is lending.

As to the Agreement itself, if you do not have access to an approved, regularly updated, localized document from the local RE Board or similar high profile group, you should obtain MULTIPLE samples from different sources.

However this whole exercise did make me realize I probably do need to be a bit more aggressive on raising the rents on my legacy units (especially if I don't get any organic turn over (which I usually use to rehab and raise the rent to market).

NOTE: If you do not exercise your option, you would lose all monthly saved option funding to the property owner. 

Do you have them fill out the application before showing the property, or just to give them a sample of what they'll have to do if they decide to apply?

I am now where I was at 21 and I'm now 36, so I exercise great caution.

Course like with any risk the larger the sample the greater it trends toward its true probability so assuming the portfolio described here is large enough and its characteristics are as you described it will start showing at some point though that many be years from now. 

It will be fun and it will exercise your spending muscle.  

I have a small sample size for what its worth.Rent for my C class location has not changed in 4 years (one tenant turnover + 2 lease renewals so far).For my township school rentals rent has gone from $840 to $860 to $880 and another from $1050 to $1060 to $1080 currently (over 4 year span).