What should you watch out for when doing a Lease Option to buy as a buyer?

Hi guys, I found a nice property and the owner is a Real Estate Investor who's open to do a lease option to buy. I've never done this before and I would like some advice from you guys who definately have more experience and knowledge.

The property is a multifamily, 4 unit, in a very good part of town that's got a good rental rate and no vacancies. Looking through the comparables I wasn't able to find something that was comparable to it but I was able to get it down from 839K to the upper 750sK. The owner lives in Houston, TX, and wants to sell (according to him) because he wants to use the money in TX since it's cheaper to buy and it's a better investment all together. He also said that he's not there anymore and it's harder to be a landlord, even though his partner is here in NYC. The building is full of tenants, but the rent could be about $25-$50 higher. I asked him about this and he said that they were "good" tenants and he didn't want to loose them. But if it's a good neighborhood I wonder if it's really that hard to loose them. Maybe the tenants aren't that good after all and he's just wanting to get rid of the headache and leaving the dirty work for the new owner. I don't know, but I'll get a better idea once I go meet the tenants this Saturday God willing.

I asked about owner financing but he cannot since he has country wide and they said that they can't put anyone else on the deed unless he pays off the mortgage. Basically he can't do it. Anyways, I'm having a little trouble with the numbers and maybe some of you guys have some suggestions for me to be able to find a formula that can better help me do the numbers to see if it'll work.

He told me that he would not do a lease option for any more than 24 months, which I do not like at all. How can I make it attractive for him to want to do it for a minimum of 36 months? The rental rates come in at an average of $1300. He's renting the apts around 1225. Now, the taxes are about 4K, and the utilities come in at around $4,000 a month with the taxes. Of course I added a little more just in case so as to not get any surprises. By the way does anyone know where one could get a better assesment of the utilities outside of asking the owner? What if they're lying?

How on earth could I make this work? How should I negotiate the rent amount for the lease option? His mortgage he said was about $4,100 though he said not to worry about it. I was like huh? Also he said that he wanted 80K as a deposit that would go towards the final payment.

How does all this work? Does anyone have a simple dumb version they can share with me please? Because it sounds so confusing, and the numbers make me dizzy.Still, I find myself sooooo excited about the possibilities and I want to learn as much as I can and finally understand it.

Thanks in advanced folks. I really appreciate your wisdom and your advice.

Carolina.