Give them the option of breaking the lease without penalty. 

If you're ok with roommates and generating some leases, ground rules, and interviewing folks before they move in, you really can't go wrong with house hacking.

Used decent envelope printer, $7,500 (lease for $250 per month for 39 months).  

But then I was tapped out on access to funds, so I switched to creative means, obtaining the next 3 properties via lease-options.

Once you read the explanation below, you will understand how REALLY bad things can be if you don't get the letters but go through with the purchase.First, the owner/seller should have a clause in the lease requiring tenants to sign (or object to in writing) tenant estoppel letters if presented to them.

The lender seems to believe that the only rent by the room strategy that exists is renting rooms to college students and his quote to me was "more people, more leases, more problems".What do I know?? 

- Any suggestions for backup strategies, like selling undeveloped land or leasing, if the market or project plan changes?

Use a good lease Have proper insuranceAdd an $1million umbrella policyAnyone can sue for anything, but winning is another issue.

For example, their rent is $2000, they pay me $1000, I then apply the $1000 to the renovation project, which they estimate to be around $8,000.How should I write up the lease agreement as far as collecting the rents?

I am striving to purchase rental/lease properties within a 1 hour drive.