You would have to exercise your option and get a loan on the house and pay off the underlying 1.5 million and then pocket the remainder.

We actually have a scanner in the house, so this will be a good exercise for it.

And the IRS does do this.Here are some factors from a case.In determining whether the income should be classified as ordinary income or capital gain, the court evaluated nine criteria: (1) the taxpayer’s purpose in acquiring the property; (2) the purpose for which the property was subsequently held; (3) the taxpayer’s everyday business and the relationship of the income from the property to the taxpayer’s total income; (4) the frequency, continuity, and substantiality of sales of property; (5) the extent of developing and improving the property to increase sales revenue; (6) the extent to which the taxpayer used advertising, promotion, or other activities to increase sales; (7) the use of a business office for the sale of property; (8) the character and degree of supervision or control the taxpayer exercised over any representative selling the property; and (9) the time and effort the taxpayer habitually devoted to sales of property.

I started having typed discussions with my future self to help me answer tough questions/challenges I am struggling with...super powerful exercise.

According to local market experts, even 10-year leases may have to offer packages worth five to six years of the total rent collected during the lease to attract tenants.Weak market conditions have resulted in developers exercising restraint when commencing new office projects, which has allowed the space under construction, 3.4 million SF, to come down from a recent high of 8.8 million square feet in 2020.

You will have to exercise the option to purchase and if the value of the property is high enough then use a HELOC to pull cash out after you own the property.  

They may use other verbiage but the owner can not sell the property since you have a vested interest in the property.Your lease purchase or lease option contract should have language noting the seller can not and will not sell to any other party until you exercise your right to purchase or option to purchase.Clear as mud?

You have to exercise discernment when determining if someone is the guru they claim to be. 

This of course doesn’t mean (1) they will find out that the house is not o/o, and (2) that even if they find out that they will choose to exercise this clause.  

For now don't worry about zoning, this is an academic exercise.