THE TENANT FURTHERUNDERSTANDS THAT THE LANDLORD SHALL HAVE THE ABSOLUTE RIGHT TO DEMANDTHE IMMEDIATE VACATION OF THE PREMISES BY THE TENANT AND THAT THELANDLORD MAY EXERCISE THEIR RIGHT AT ANY TIME THAT THE LANDLORD FEELSTHAT ANY TERMS OF THE LEASE MAY HAVE BEEN VIOLATED.Put in a clause recently having to do with abandonment of property. 

And then you have students and tenants that run to the four corners of the earth and you get to launch into some exercise in which student/parent(s) you want to hold accountable. 

There are plenty of other ways to invest without taking on leverage-- exercise those.

Now here's the gray part that you have to exercise prudence and integrity with.  

The exercises are very specific and have been helpful to us.

Also what happens if the due on sale clause is exercised?

Deed executed between seller and Investor 1. 2) Investor 2 puts a 1K option on the house with Investor 1 at a purchase price of 75K. 3) Retail buyer comes along to buy house from Investor 1 at 110K with 25K down. 4) Investor 1 pays Investor 2 40K to NOT exercise the option, 25K immediately and the balance in payments over time. 5) This is investor 1's first flip and will be the only one this tax year.Other than the 1K option money which is ordinary income, what taxes will Investor 1 incur?

I would agree with you on all parts, possibly a daunting exercise...

Lender's decision not to exercise a right or remedy under this Note at a given time does not waive the Lender's ability to exercise that right or remedy at a later date. 11.

A good exercise is to fill out this Preliminary Change of Ownership report (PCOR) which you can find on the County's website: http://www.sonoma-county.org/Assessor/HTML_Documen...It is smart to submit a PCOR with your real property recordings to better clarify your case with the Assessor and any reassessments they might perform.