In practice, however, I've never heard of (1) a bank realizing that the property was sold, (2) caring, since they're getting paid, or (3) exercising that clause.Some people only do Subject-To for a short time while they work out another exit clause. 

You hiring them should have been formalized and documented, including the W2s, just like you would do with an unrelated worker:https://www.nolo.com/legal-encyclopedia/why-its-tax-smart-hire-your-children.html1099s are not appropriate for your own 12 and 14-yo kids, because you exercise complete control over their work.

As of now, most realtors are probably still telling their clients everything is peachy, just need to exercise caution when showing.  

My clients are still able to exercise 3.5-5% down paying PMI and getting rates in the low 3%.

My question is how likely are they or their brokerage to exercise that clause?

Here's an example from an actual BRRRR I did (except for rounding a couple numbers to make everything easier for this exercise):REFI LAST:Purchase w/cash: $25,000Rehab: $30,000ARV: $100,000Loan (@ 65% LTV) = $65,000Closing Costs: $5000PITI: $550Rent: $995Equity: 35%Out of pocket: $0 (actually made $5K)REFI FIRST:Finance $25,000 (w/20% down): $5,000Closing Costs: $5,000*Rehab: $30,000ARV: $100,000PITI: $240Rent: $995Equity: 80%Out of pocket: $40,000*This is probably going to be lower due to a lower financed amount...but still, hopefully you get my point :)

And he still gets use of the property while he does that.Then in the 5 years or whatever he exercises the option and purchases the property. 

“If you exercise ordinary business care and prudence and forany number of circumstances can’t meet your obligations, I think, in time, any kind of penalty issueshould be able to be resolved.”Auchterlonie said taxpayers should also keep in mind the IRS’s first-time penalty abatement policy.

While talking about different types of assets is within the general nature of the original posters topic (recession proof real estate) your specific situation you might want to create a separate thread or contact me on here directly.I want the original posters thread to stay on general topic.For exercise I go running these days. 45 years old and I run 15 miles at a time at least 4 times a week.

Include the following types of photos in your listing: Exterior shots, Living area, Kitchen, View, Master bedroom, Guest bedroomsExtras - Don't forget to include… Pictures of the yard, pool, hot tub, parking amenities, neighborhood, views and exercise facilities (if any).· Staging – Staging a property is when you setup furniture in a property to give a potential renter of buyer a better idea of how the property would look when they move in.