Just think, in 10 years a house that is sending you the equivalent of $1,300/mo. is a good thing.

What is the rational not to invest in Sacramentoit over 50 % less than the bay area and rent appear to be okay

I learned he's got 15 or so crews going simultaneously, fixing up mostly "C" properties in Indy--what appeared to be a serious flipping operation.

The fact that she paid less than half of the rent and doesn't appear to have enough finances to cover things she knew about (birthday, Christmas) doesn't bode well.

@Ryan EnkYes I think that is the problem - the appeal of lease options to a tenant buyer is the rent credits, and the appeal for the investor to enter into a lease option sandwich or assignment is to collect a large fee up front.As others pointed out, it appears that since Dodd Frank, offering the above can be misconstrued as entering into a land contract rather than lease.I don't really know what to think.

They appear to be directed more at your situation as an investor who is starting out and whether a limited liability entity is suitable for your situation. 

Reading between the lines, it appears that is your limiting factor. 

We also count "income equivalents" such as food stamps and utility subsidies during the qualification process.  

This is the equivalent of a turnover every 20 months. 5/100=1/20.

I've had situations where I came to the conclusion a foreclosure action was improper and hired counsel to file a notice of appearance on behalf of the insured to put on a defense thereby stopping an immediate foreclosure judgment.