I think that wackerengines.com has the parts to convert a engine over for you. They have Homelite engine conversion parts.
You basically need the prop adapter hub, a CDI unit with the timing sensor and magnet.

They use a small neodymium magnet with the sensor. The flywheel magnet is too big.

Basically you find top dead center. Then using a degree wheel, locate a convenient spot for the magnet and sensor. Maybe mounting the sensor first. Then place the magnet so that the sensor is about 28 degrees before top dead center (BTDC) as the magnet passes it. The sensor triggers on the trailing edge as the magnet passes by.