At the very least I'd make sure I had a big, fat, enormous reserve fund as it could take a little while for the property to stabilize.

My first local flip was very successful but that was in the good old days when finding fat deals and then selling them was easy.

It's fairly new and in a quite neighborhood just outside of town, an added bonus is it is in a subdivision that went belly up in the down turn so there is lots of open area (empty lots and roads) to go for walks and enjoy the outdoors.The second item is the installation itself. 

That said, I'm sure you hope to live to be 59 and older, and having a big fat pile of tax sheltered income to draw from at that point in time would be a benefit, even if you have done other things to allow you to leave the rat race at an earlier age.With a self-directed IRA, you can diversify any existing savings into real estate and potentially get better results than investing in conventional financial products.  

What you'll get is a fat legal fee from some sleazey attorney, but your house still won't be sold.Third issue you raise:  option money is nonrefundable, period.  

Sometimes (like now) the deals aren't that fat.

However let’s not forget that the fat cats in Washington D.C. and beyond are the ones that created it, not me.

I don't have linkden ( well I have it but have not been on the site in years)... real estate is belly to belly...

Like Deanna suggested, have some portable air conditioners on hand for such emergencies.Last year we had to replace two HVAC units; course they went belly up in the middle of summer. 

He needs "belly to belly" discussion at this point and don't tell him it's your first REI. ;-) Keep in mind that he may have a project in mind that requires the funds from selling this for cash.