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What are the steps to use an external dhcp server with vlan or flat provider?

I have a Pike openstack with 1 controller/network node and 2 x compute nodes.

The controller / network node is a VM. The compute nodes are physical.

I have configured a VLAN network and launched some instances but they are not receiving DHCP most of the time. BTW the gre networks and floating ip's to through the controller/network node is working fine but as it's a VM there's a limitation where I'm unable to use VLANs through the VM.

I decided to configure an external dhcp server for the VLAN network. What I find is 1) the external DHCP server offers a DHCP to the instance on openstack, but openstack shows that it has a different IP. This in turn breaks IP connectivity to the instance because the iptables rules do not match the instances IP. I have tried having no dhcp on the openstack network config but I find that openstack still configures an ip there.

How can I move completely to external dhcp for the VLAN network? Seems it's conflicting with openstack somewhere, but i am unsure as to where exactly.