Hence there are many valid reasons a lender will not exercise the DOS rights.

That would likely enhance the sales price if I were to sell.The nice interior and design of the home may not help the bottom line in terms of keeping a nice return on investment for rental return, but in my mind it makes the investment more attractive because it should be easier to rent, and if I decide I don't like being a landlord I should be able to sell it without too much difficulty.

Is pick up exercise and lifting.

Also, does anyone give any of the option money back if the tenant doesn't exercise the option?

Thanks Mike, atarget, and Jim for all of your tips.I agree it's not a good deal, but this was a great exercise for me to do the analysis.Is there a Cincinnati REIA meeting tomorrow?

I would have the LLC exercise the option and then sell the LLC to the developer.

Lease/options can force you into a foreclosure situation even though you are the landlord.That said a lease/option can still be a good idea.If you use a rent credit that reduces the rent to below market levels the lender could have issues later when the person goes to exercise their option.

Completely legal as no law is being broken.The DOS clause in the loan contact can be exercised by the lender.

If they exercise the option then they make a built in profit.

Do the options typically get exercised?