If so, this is the RISKIEST option.

Deal with it.Correct me where I'm wrong but Novations can be executed by either a Power of Attorney being given to the investor or by an investor just doing the paperwork, both being done after they secure their interest with an option contract (unless there's some other creative thing I haven't heard about yet).

It would be our preference to invest in upstate NY because we could drive there relatively easily, but if there are better deals elsewhere, we would be more inclined to go with option (1).Hi Bethany, if you're investing in NY, unfortunately the price range is crazy high and you won't find any cash flow.

Look into all the options.  

For example, I've had a couple of 3+ bedrooms sit for a longer period of time because they only had one parking space available (and no on-street options nearby).

Here is how some steps are categorized.Performing Loan30 day lates90 day latesAssignmentNotice of Default VA loanNotice of Default FHA loanNotice of Default Conventional loanNotice of Trustee's Sale/Notice of ForeclosureLis PendensContinuation/PostponementLoan ModificationReinstatementBankruptcyAuctionReal Estate OwnedThere other possible steps, but these are what you will typically see.The key is to know what you can do in each of the steps in the state the property is in.Then you need to know what to avoid and what the options are for the owner and options available to the lender.

Note both of these options require paying the tenant to vacate for a no-fault eviction (terrible name as if lease is up it is not an eviction).Note terminating a lease agreement for the purpose of rehabbing the unit is under attack in some places in the county. 

In southern California Oceanside seems to be an option.

Shaylynn, looks like you’ve put a lot of thought into picking the right market, and you’ve got some solid options on your list.

IMO better options- If you don't need the money in the next 10+ years look into Annuities I'm seeing 7-9% and you don't have to participate in market downturns.