If you've done a bunch of deals and are familiar with potential pitfalls and comfortable with the risk, then I'd say go for it, otherwise avoid. 

Common "pitfalls" would be incorrect rehab estimate, contractors flaking out and not finishing or doing shoddy work, permit issues, finding hidden issues like foundation cracks, termites, mold, being too optimistic on comps, ignoring closing and holding costs, your own mental fatigue.

Sell for $5,000 down plus terms and buy for the same terms with $2,000 down, where I would retain the difference, $3,000 and assign the terms and walk away.Has any one done this much and are there pitfalls to consider? 

Sure the $10k price point makes it super low risk, but what could be the potential pitfalls of a fire damaged home when it comes to rehab?

I've got a single family home that is soon to be rehabbed and available for rent this June and am wondering about offering this one with a rent to own lease.How successful is this strategy with you all and what are the pitfalls I should be looking out for?  

Yikes ~ With the cost of utilities rising daily it seems, this would be a HUGE pitfall for me here in Tennessee.  

If anyone has questions, but would rather do a little reading before asking, I have tried to break down the basics at http://kimandbagwell.com/pitfalls-for-the-inexperi...I only recently got started here at bigger pockets, so the best way to reach me is at my work email, which you can find on the website i just linked to.Here lately, there are a lot of investors bidding way too high (presumably with other people's money). 

What unforeseen pitfalls did you encounter if any?

The pitfall with this strategy is that the money is tied up until the property owner redeems. 

My post was not meant to criticize you, just to warn a newbie against some of the pitfalls and difficulties that could arise that may not occur to a newly licensed agent, and indeed have never come into play with me personally over 11 years in the business.