It seems like a good way to get extra cash flow with very little work, plus with only 20% of these tenants actually exercising their option to buy, I'd still keep my rental house. 

Even if you bring down optimistic rent expectation in Charlotte, NC area, it still seems like a good investment on paper.

You seem to think that the owners may not know the value of the house.  

Something about this deal just seems fishy to me.

I would probably use those forms unless I thought the situation was complicated by something.If your lending attorney is familiar with RE lending and works in the space he would have those documents off the shelf to be edited for your situation.On the borrowing end, I've always just pointed the seller to the state website and we used them with the blanks filled in as seemed appropriate.

Since I'm brand new to this, I will need a lot of hand holding as I sort through this process and I'm sure I might seem a little "flaky" as I figure things out, particularly in deciding what is the right deal and how the numbers work.

Saving income from my job plus the cash flow from my investments seems like a longer plan than the one I presented but I'm open to all options.

Do you plan on telling the owner the truth  or do you plan on deceiving them which seems  the most popular method for uneducated people getting into the business

I have not seen the other two units because they are occupied and the agent said they are paying $1050 each it seems high for the area though.

I guess it must mean something else because if the comps are $130-150k, it seems like the owner should still be able to get more than $35k by selling it on the open market, even if the interior is in less than desirable condition.