Leas options in a declining market are great for the person selling and not great for the person buying. Basically you agree on a purchase price *now* for a house you won't be buying for another 2-3 years. You put down money (option consideration) and pay $ in additional rent. If you choose not to, or are unable to, purchase the home at the end of the option, YOU LOSE ALL THAT MONEY. As the first responder mentioned, a lease option can be a good choice if you want to lock in a price before home values skyrocket, but honestly, that is not what we're dealing with right now. Plus, if lease option out your current home and lease option a new one at the same time, there is little possibility of both transactions being beneficial to you or having the same positive outcome at the same time. Maybe you just rent out your current home and rent one you'd like in Temecula and leave it at that? That seems to me to be the most prudent thing to do if your heart is really set on making the move. Good luck!

Lease Option is a great way to go and would probably be done faster then a Conventional Mortgage. Its more like 7 of 10 will go through, Its all about how well you screen your tenant/buyer.
One more thing, never take money as a downpayment the proper term is option consideration. Downpayment implys that it may be refundable and gives the tenant/buyer equitable interest in the property. Remember they are only renting until they exersize the option.

Think long and hard regarding your plan.,.. I would say 8 out of 10 lease options are not executed. Which means if you dont close when agreed, you loose your deposit.... What happens if your renter flakes on you? What happens if something happens to that house and it needs cash to fix? What happens is something catastrophic happens like you get laid off? All things to consider when selling and buying in today's market...

King of Craigslist

Great idea - lease options can be a powerful tool, and a win-win situation for both you and the seller. I would actually recommend doing a lease option yourself with your own home, and then also doing a lease option to buy on the house you want as well. It is difficult to say how much a fair amount is for rent - it isn't really based on the perceived value of the home (ie. 600k in your question). Instead it is based on the FMR - Fair Market Rent for a comparable home. I would recommend looking through some of the online search engines like Craigs List to see what people with similar homes are asking for rent. Of course, this is only an indicator, not a true comparable since these will be ASKING prices, not actual LEASED prices. Nonetheless, it will give you an idea of the competition, and therefore it will give you an idea of what others may be getting for similiar homes. On a lease option, the amount of the rent that goes towards the purchase price is always 100% negotiable between the seller and potential buyer, as is the down payment which is also very customary - ie. the potential buyer usually puts down a significant sum of money which is also later credited towards the purchase price IF the buyer buys. If the buyer defaults, the buyer loses their down payment. On the flip side, the buyer gets to lock in a favorable purchase price at today's market price.