People on BiggerPockets tend to call this "house hacking", but in reality this idea/strategy has been utilized for a long time as an easy means of entering real estate investing.  

Sorry for some reality in real estate contracts, if you want a contract to hold water there MUST be a financially measurable consideration given as you take an equity position at the time you contract, no money, no equity!

As I lamented about the whole process, all the wasted work, wasted research and time I spent NOT making a deal, I was reminded by a trusted, guiding voice in my life (my wife) of the reality of the situation... 

The marketplace already has way to many seminar holders who preach theories and their past successes - I want to be connected with those people who make this a reality and not a theory or a replication of someone else's one-time success.

The reality is that people are pretty aware of how long foreclosure takes, and are anything but motivated at the point they first start missing payments.

Dev Horn and Jay Hindrics have always giving current to today's realities, excellent advice.In hot market Atlanata there are NO deals on MLS.  

In reality I know it happens but it's rare for someone to actually lose their EMD. 

Certainly, you can put in a process by which she can repay the funds, but the position of your heart needs to face the possible reality that you'll never see any of it back.If helping her out is the right thing to do, it's the right the to do whether or not you get money again....

I know people who live on Lake Mitchell, and the realtor for that area (Lake Mitchell Reality) has tons of properties listed.

To be brutally honest, the majority of people who try to become lease option investors end up failing, and I'm not in the business of selling information (aka I'm not a guru).