(You'll increase your ROI considerably, as only 30- 60% will typically 'exercise their option to purchase,' unless you're very selective about who 'gets in,' and then they must also either set aside money monthly and/ or 'repair their credit,' as part of the deal... after putting down a significant (non refundable) amount, up front. 2- 5% is not going to work well here in California I don't think, in many instances???

This exercise is also valid when you see two or more properties and assign them the timeline or projection based in your own math, comparison of two or more properties, which properties will provide the optimal cash-flow.

The sale - and therefore the 1031 Exchange - would occur at the back end once they notify you that they wish to exercise their option to buy. 

A lease audit is the exercise of comparing the information on the rent roll to the actual lease files. 

My son is a recent graduate earning his BA in Exercise Science and a minor in Biology.

I was thinking I should exercise my option, and get a sale agreement contract on it with 6 months to close.

If you are in the option period, you can always exercise the option if you are not confident that the property is what you were looking for. 

Has the college student exercised the purchase option?  

I'm not saying this will happen, but this is what I'd be prepared for ... and let's face it, the next recession is never a question of if, only a question of when and how bad.Another mental exercise I like to go through is what I call the "and" game ... what and how many things would have to go wrong for you to get in trouble on your investments.

AH ha I was able to tag someoneBob bought a bad note in Chicago and just went through this exercise and I believe he came to the conclusion that buying bad paper was not exactly the best strategy but he will be able to answer your questions with current data  as I said I am pretty sure he just went through this same exercise in Chicago.