At minimum the tenant needs to be instructed that they must exercise better hygiene, and I would put this in writing in case you have to sue in small claims for damages.

On the flip side, if you need to exercise a lot of control over your investment to be comfortable (ie. be able to see the property regularly, choose tenants yourself etc) and you'd rather have control than free time, then more passive buy-and-hold options may not work for you.

@Nicholas MischThe ARM product was developed by bankers to induce folks to get a low introductory rate that they could get approved for based on their income and debt levels because of the lower payment terms.  

Another question is just from personal experience from those who have bought tax deeds how often do the original owners exercise the right of redemption.

What should be the term for the lease so that it is not considered as a sale at the time of lease option agreement in case tenant wanted to exercise the option during the term?

I think that I'd lease option it out to someone and if it sold, it would be due to them exercising their purchase option.

When I exercise option to sell, does bank take into consideration equity in the property (option price/market value), or would I still need to put down 20% in cash?

If so, I would send the HOA a letter stating where they dropped the ball, and demand the full amount refunded or you'll exercise your right to go to small claims court and get double your deposit back.Hope this works out for you!

***Additionally, a mortgage broker that is able to take a tenant-buyer's option consideration that is paid to me (wholesale lease option deal), and either apply that consideration towards the TB's down payment when the exercise their right to purchase ORdiscount the price of the house.Typically the consideration goes through a third-party escrow account (my attorney's), and that helps with the above.Typically mortgage brokers who understand this type of situation will only submit financing applications to banks they have great relationships and won't have an issue with this type of thing.Thanks in advance!!

That's not to say that other Title companies won't "work with" investors, but the "work" you are most likely referring to is legal in nature and in providing those services as an inducement to get your business, these smaller title companies often knowingly walk across that solid yellow line.