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Migrating from SBS 2008 to essentials 2012

I am trying to do a migration of sbs 2008 standard to server 2012 essentials and office 365.
When I try  to run the migration prep tool on the source server (sbs 2008 standard) I keep getting an error stating that the user must me a member of the domain admin, schema admin and enterprise admins groups.
the user account that is running the prep tool is a member of those gorups. I even created a new account to test and that account gets the same error.
I found one post stating that if the primary group is set as one of the 3 required groups it will fail. I have verified that this is not the case. I am stuck here.
There are only 6 users on the network, so would it just be faster to migrate the email to office 365 and just do a clean install of essentials and create a new domain?
The only major hang up is a crm software package that uses SQL and ad rights to function.
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I guess I will go that route. THe old domain will remain up until the migration is finished, so I can reset the desktop local admin. 3 of the dsktops will be new systems anyway. I was just hoping to find a quick answer. Thanks