As a side note and not promoting anything, he also teaches / coaches L/O.

All I can say is the seller is under the impression he can't rent the thing until his note is payed off.I have only run into this one before, in passing, while talking to an LO about a property I ultimately didn't buy.

And since I know very little about residential lending and even less about LO compensation, you now have the sum total of my knowledge on the subject. 

Yes...I did say MLS-listed, not expired.I believe John does the LO side-by-side the agent.

A L/O is simply a lease to get possession, an option to purchase is taken under a separate contract, giving you the right to buy later on. 

@Steve Vaughan I agree, this didn't look like a L/O to me.

Low and behold on the day of closing their LO accidently typed in a 3 instead of a 4 on one of the 50 sheets of paper work.

I was wondering if it would be a good idea to finance my first fix n flip with a conventional loan.I am not sure if I will be legally able to go this route if there is a time restriction on holding the property .I am going to speak to a LO this week end.

In a L/O situation, this is cheaper than a typical lease-up fee and not hard to push onto the seller because this is the cost of the deal being "licensed and insured".As an agent, why are you doing assignments instead of just brokering the transaction? 

There is a gentleman by the name of Merle Woolley who made his living in this area doing the exact type of deal I'm trying to do - buy around 20% below market and selling on a LO.