One of my tenants just exercise their option to buy, so I sold it after 15 months.Purchase Price $77KRehab Costs: $20KRent: $1300 with $200 given as option bonusAgreed to Sale Price: $139KOption Period: 3 yearsSeller gave me $4K in option consideration and through monthly rent bonus, they earned another $3K ($200 per month for 15 mo).

If you are going to tell the bank that you are assuming the loan, they may or may not exercise the due on sale clause immediately, or they could exercise it any time in the future.

This exercise will help eliminate you wasting time on whether this deal is even worth considering.

I've decided to exercise my due diligence clause and get out of the contract.

BTW: Can’t be sued for exercising your right to freedom of speech.Next time use a licensed contractor; check the board that licensed them.

If you cannot find a buyer you exercise the option and terminate the contract.

Even if, there is not a high chance of you extending additional credit to him to consolidate, running through this exercise with him and you looking at this might help keep the relationship healthy, as you are trying to help him.

Banks & CUs are not in the business of owning property.Of course that is not to say that a financial institution wouldn't exercise their option to call the loan due.This is my personal opinion and not legal or financial advice.

I apply the option fee to the purchase price if they exercise the option but if they do not exercise the option that dollar amount stays in your pocket.

At the end of that exercise add up what you spent, divide it by 12 and you now know exactly how much monthly passive income (rents & interest) you need to create to achieve freedom in this very unfree world.