Better to play it safe.

If you have an agent in between you and another principle to the transaction, it is going to be easier to take a hard line in the negotiating stance.  

In any transaction the seller has to pay off any loans on the property in addition to other costs of the sale.

For all 1- to 4-unit investment property transactions, cash reserves equal to six (6) months PITI for the subject property are required.

How can I make them see reason so that I can make them a gratuitous amount of money (hell more then ill make on each transaction most of the time)

I'm looking at a building in the not so safe area of Phoenix. 

My guess is it has to be an arm's-length transaction but I am no VA loan expert.  

@Mark W.Virginia is a very intensive legal state in real estate transactionsI would definitely consider getting my realtor license if I'm going to do this kind of business in VirginiaUnderstand that you can't guarantee that the tenant buyer will get the mortgage and I would have a registered mortgage loan originator look at every single tenant buyer applicationTaxation of option payments are not involved in lease purchase arrangements, they are earnest money agreements, not option money agreementsIf it was a true option payment, the money is taxed when the option is either exercise or expiresI train in leases, options and other kinds of agreements but I would recommend that if you want to do these transactions, you get licensed

I haven't found one that would do that in the Bay Area.2) the bank will likely frown upon the sale as this is a non-arms length transaction with a sizable  price mark-up.Good luck. 

This means the borrower requirements for a loan will be based on the loan to value as a purchase transaction, not a refinance.