Depending on the facts and circumstances of the agreement, it could either be treated either1) the sale occurs as of the original agreement date, and then your taxable gain is generally spread out over the life of the principal payments as an installment sale (although I should mention any depreciation you've taken on your property could affect this), or2) the sale does not occur until the lease option is exercised, and gain reported at that time.

The buyer also has the risk that the seller will sue him if such does occur and the buyer is unable to retire the note.The risk for the seller has to do with the fact that the seller is liable for a note secured by a property he no longer owns.

Make a list of potential problems, see what your lease says about them, and figure out how to handle them before they occur.

Allstate and State Farm in Illinois lately have been huge a**holes as far as providing coverage when a loss occurs.

There can be many reasons for failure, and there can be many situations where investors perceive that a failure has occurred when there has not been a failure.I wrote an article for the BiggerPockets blog last week that talked about failures in the context of syndication sponsors that have turned non-responsive...perhaps that's a help. 

It’s our understanding that bed bug bites occur in more of a line formation and not so much in clusters, at least from what we can tell from the photo.

Worst case, I can look up zoning changes and match the address with recent sales, however, if no permits were pulled I do not know if renovations occurred further increasing the value.

You can sit and watch the auctions happen live every day that they are occurring.  

If you tolerate riskier investments then buying a lot or vacant land (Titled, always titled) has a bigger potential return on the other hand if no more development occurs in the area then you will be left with a more long term investment.

Pre-schedule all your maintenance items and setup a re-occurring schedulea.