How do you structure this deal to make it go off without any issues?

This is abnormal and any reasonable seller and listing agent should be more than accommodating for this type of thing. 

How should I structure this option / offer agreement?

With the way my brain is wired I like to have a moderate amount of organization and structure. 

You also need to know your local market and then you need to know how to properly and legally structure and perform the transaction.

The county could likely force removal of a structure if it encroached upon their land.

Does anyone have any advice on a marketing campaign and how to structure it?

Generally speaking if they are all CA SFRs, rented and/or all income is fine, credit is good, and looking to go conventional, your rate should be in the low to mid-3's depending, even for cash out w/probably a pt or 2, depending on how the loan is structured. 

Structural engineer?

Without defining your goals, it will be hard to know which of the option you are considering today will work best for you.Your plan does not need to be complex or in any specific structure.