The risk to the buyer can be summed up as : violation of sue on sale can lead to note being accelerated:; assuming buyer is an investor and seller a homeowner the buyer will probably be named in a lawsuit should either the note be called or default occur.  

He uses $1,800 for water/sewer as a default estimate for 2BD duplexes, and usually lists in insurance in the 900-range as well. 

I assume this is now a default that Airbnb has set that requires you to have a license, or you are automatically defaulted to 30-day stays. 

Your borrower is in default of the mortgage and should be notified of that.

I can only think of reasons not to: capital gains tax, loan interest rate less than the property’s cash flow, risk… The only way I could make it work would be to identify a buyer I know will default.

They could have a lien on the property in case you default for some reason to provide the investor some assurances.

His reasoning: easier eviction should tenant default. 

It would defy logic to first pay default.

It does say they are in default of the lease if anybody other than the named tenants occupy the house, that they must comply with the hoa rules (which restricts str), and that subleasing / transfer of the agreement is not permitted.

Many folks these days are opting not to work on Subto's as that strategy has become commoditized and marketed by big industry gurus which now in turn has led to the lenders taking notice and starting to call the notes due, since a subto scenario is a technical default, unless there was a formal assumption done.