HIGHLIGHT it and say you see no reason for them not to be out as per their original plans,, that the new tenant has said they need access and can not be delayed.. and if they want to risk the legal issues of this portion of the lease you fully intend to exercise that option, and here is the Notice of Lease extension per B on their lease agreement.. 

All that is fine, I'm just looking to fill in the blanks from there on - which lenders to look at, likely interest rates (ball park) and if they'd touch me at all.I have about $450,000 cash for the sake of this exercise, so I was thinking 40% lend could have me looking at assets up to $750,000.

I love generating ideas :)Market to people that exercise, maybe a 'mudder dash' event.Rent to hunters?

If the owner knew he/she was going to sell the property there might be clauses in there that you can exercise. 

However, depending on the size of the dog you might want to consider that perhaps a dog being able to get more exercise outside in the backyard might less likely to do damage inside.Gail

I've been a commercial broker for 30 yearsFor a credit tenant, If the primary term is 15 years (with no options to terminate) then the following is market5% for yrs 1-5 plus 3% for yrs  6 - 10 plus 1% of remaining term.Most brokers ask to be paid on options (if and when exercised) and expansions, but really dont expect to be paid on them.

It was my understanding that these are always negotiable and sometimes the landlord can't always exercise the full the rental increase but sometimes can only get partial. 

You had better ensure that you can carry the mortgage in 3 years, as you can be rest assured that if the price of oil does not go back up, they will not likely exercise their right to renew the lease again.  

This thread was initiated not to agree on the best return metric but as an academic exercise to enable me to understand why the annualized return (IRR) goes down over time for a subject property I was analyzing. @ Stephen Greenway correctly explained that the decreasing irr comes from holding the property and averaging more modest and sustainable cash flow returns over the long haul bringing down the initial "flip" return. 

Now, as far as a lease option, in Texas, your buyer has only 6 month to exercise his option to buy, after 6 months the rules change (do some real research and find out the laws on lease options) the buyer could demand all his down payment money and all the payments back from you.