The buyer is now having some issues securing the financing as they are using stated income.

Frankly there is no way to do so in the US as there is no real listed securities that represent the whole market.

It was at that point i realized these guys had nice secure lives and along with the construction i also liked that aspect .

They would probably owe you rent until you re-rent it (good luck getting anything beyond your security deposit) and would forfeit their option money.All the specifics would need to be in the lease and in the option documents.Really, its no different than if you purchased a house, got a mortgage and then rented out.

Your exit strategy is "hold for LT rental", but you don't say how much rent this unit will throw off.

You need to find out what protected groups there are in your jurisdication, in addition to the federal groups: race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents of legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability).

Making contacts(via the internet), drafting a plan, getting my credit in line, securing funds, but I am finding I keep coming across a common road block.

Throwing in a complication, just for fun...There are also investors who purchase the house via Subject To, then sell it via Lease Option.

You would end up needing to secure the note with a personal signature.

But a buddy of mine has done this for the last six years like clockwork. 24 months and on to the next house.A little caution on starting a rehab with little secured funding.