Sounds as if the agents in 95129 have given you pretty good information on what a house would cost, what your payments would be, and what income you'd need to qualify.
Let's address the whole issue of lease-options and rent-to-own. First, I'm a big advocate for lease-options, but only in the right circumstances. And while the mechanics of doing a lease-option on an expensive home are no different than doing one on a small starter home, there are far fewer opportunities. And let's crunch the lease-option numbers. Everything in a lease-option is negotiable, but here's some data.
First, you'd likely have to provide an up-front option fee. It might only be a token fee--$1,000 or so. However, more likely, it'd be 2%-4% of the value of the house. So, in many cases, you'd be looking at an option fee of maybe $24,000-$48,000. Let's be very generous and say pick a bottom-end number: $25,000.
Now you'll have the monthly payment. Lease-options often are priced somewhat higher than the comparable rent. I don't know what a $1.2 million home in 95129 would rent for. Where I live, it would be approximately $6,000. Put a bit on top of that for the lease-option portion and you might have a rental payment of $6,500, with some portion of that (say $1,000) credited toward the purchase price.
Could you afford an upfront option fee of $25,000 and monthly payments of $6,500? (And we're really being conservative here. The numbers could be more like $45,000 and monthly payments of $8,000.)
Then, at some point, you'd want to exercise your option. Three years is a reasonable period. At that point, you'd have $36,000 in option credits plus the $25,000 option fee. So you'd have a total of $61,000 to offset the purchase price. If you'd agreed on a purchase price of $1.3 million (only a shade over the $1.2 million the property is worth today), you'd have to come up with $199,000 as a down payment and then get a mortgage for $1,040,000. In 3 years, interest rates probably will be slightly higher. Let's say they're 6% for jumbo loans. Your monthly payments would be $6,235--principle and interest, no taxes in there. I don't know what your taxes are there, but where I am it'd be maybe another $1,000 a month.
I doubt those numbers are doable for you.
I did write a blog on how to find lease options. It's at http://bit.ly/findaleaseoption
They are out there, though--as I said above--more commonly found in moderately-priced houses.
Hope that helps.