Why would anyone/institutions pay a property management company to handle NNN properties ?

I would suggest calling and talking to the specific loan officer/processor who is handling your loan and find out exactly what the hold up is. 

I'm looking for advise on the under rented, long term tenant situation and how to handle the fact that all of the leases are ending.  

I think you can handle an additional 5 properties easily with the amount of reserves you have to handle vacancies or CapEx.  

I have read on some of the other threads on the Lease Purchase Option and understand how the concept works, but just wanted some feedback and direction on finding the proper forms and how to handle it so that as the owner of the property, I am covered. 

We prefer to do move-out walk-throughs with the tenants, so they will not be surprised with how we handle their security deposit.

Welcome to the site @Preston MorrisonThe 1st step to take towards that first property is going to be solid w2 income and a good credit score. that will help you get approved for a mortgage.Business courses and the real estate licensure courses would also help to give you a handle on the industry.

B) It looks like there are companies who specialize in handling reverse 1031; which state would be better to find someone in for handling this, CA or CO? 

Any advice on the best medium to get a flexible, reliable work force that can handle real radar relates tasks in eastern North Carolina?

@Adam AbdullahI agree with the business plan highlighting how you'll handle liquidity of the portfolio and the type of properties away from the "slum" variety