ref=teach_headerThere is a guy in the park around my way that charges people $25 each and shows them how to exercise. 

If you choose not to exercise your option, then just let the option expire.  

Plus, there are some limitations on exercising an escalation clause. 

As @Will Koederitz mentioned there is a due on sale clause that some lenders are exercising.  

As for drivers having accidents in the parking - perhaps they were not exercising due care in light of the conditions and their experience - that is why they carry insurance.

As a thought exercise, this is fine...but if you think there is a realistic chance you'll pick up an REO listed for $124K at $75K, I think you're going to be disappointed.In my experience, there are two things at play:1.

The owner is still in control of the property and you need to depend upon him/her to a certain degree.BTW:  If you ever sit down to read the 50 or so pages of your typical mortgage agreement, you will see the lender (particularly the big five) have lots of choices ... they just seldom chose to exercise most of them.

With experience and the right conditions, maybe you could go with a 75% rule, but anything thinner than that is an exercise for the reader.Instead of making riskier purchases, maybe you can be more creative in creating value?

An appraisal based on the income it produces is about double (~$300K more).I've never exercised this option, but my main concern is this:  I now have $560K of debt on a property that is only worth $380K by normal (non-STR) metrics. 

Needing a $100k may be 5 days of cash-flow for someone like Grant, but that's a high enough number to scare most of us from ever getting started, me included.Sacrifice and exercise your saving muscle to prevent schemes and scams, shortcuts and bad partnerships.