In this case, you would continue to collect rent, but they would have a set option price that they could exercise at some future point.  

Get a 3 year lease with the optiond. exercise your option based on the low NOIe. funding can be a JV, Limited Partnership or Bank Loanf. you job is to turn around the investment, increase rents, make it more efficient.See http://www.biggerpockets.com/blogs/3/blog_posts/39...

I would figure out what path will generate the largest profit (or smallest loss) given an amount of effort you're comfortable with -- then do that.Of course, this is something that you should have figured out BEFORE you placed your bid...what makes you think the deals are profitable if you haven't gone through the exercise of analyzing them?

It is not a good choice for a passive investor, but a wonderful investment for someone who's willing to exercise a little leadership.

I completely agree that you must put yourself in the seller's shoes as best you can to match the right solution to what they want.Here is one extremely vital exercise I do now.1) Reverse engineer past profitable transactions.2) Deconstruct, examine & identify the key elements.3) Then rebuild the machine piece by piece to attempt to improve & replicate.It's a never ending process.

Hopefully no drama, since the seller is the ex-husband, and the tenant-buyer is the ex-wife, there seems to be some potential for drama, but I would have everything spelled out in writing.Of course if she doesnt exercise her option, or fails to keep up with the terms of the lease, she would forfeit her option, and I would still own it.My problem, I dont have the funding to buy a $43k house.Any ideas?

And I wanted to keep the property, and because only 20% exercised the option back then I expected to be able to keep it.

Doesn't matter if the end tenant buyer exercises their option to purchase or not.

If you've paid an application / appraisal fee to the lender that could be at risk as well.If there is another reason to quit the contract you could exercise, I would be pulling that lever.

There is a borrower right to cure the default but that must be exercised 5 days prior to sale.