Example external storage area conveniently located where it can be converted to a walk in closet as a later time.Part of the exercise is knowing the various regulations. 

Just best practices exercised consistently and persistently.

It's an opportunity cost exercise.

I would give them at least 2 years to exercise the Option.I know I'll have to pay the capital gains taxes the year they exercise the Option (or could I do another 1031?)

If you are afraid to exercise your rights or fear your tenants take a witness with you to protect your rights.Tenants that are given legal notice can not legally bar entrance by a landlord and do not need to be present for the landlord to enter.

I met this friend at an evening community college exercise class.

Homeowner was happy with this, probably hoping I wouldn't exercise my option. . .but I did. 

Of course, lenders may not always find out that you sold or may not care and may not end up exercising their right to accelerate the loan. 

When I used to mentor I had all my students do this exercise.

If there is a Due on Sales Clause your lender may consider the transfer a sale which means you'll be responsible for paying off the balance of your loan.Many people transfer the property into an LLC and the Due on Sales clause does not get exercised by the lender but you should know what your lending documents say before making a decision.Before deciding on whether or not to establish an LLC in Colorado or Minnesota you should consider what are your plans in Real Estate.