At the end of the lease, they can either exercise their purchase option, or renew both the option and the lease.Another option to consider...In retrospect, of course, effective deal analysis would probably have revealed the cash flow issues before you committed to them.

This is just a mathematical exercise that hinges on a whole bunch of assumptions:risk toleranceability to attain x% when investing outside of the shackles of your company retirement planamount of time available to spend pursuing those returnsreturn assumption inside your company planfederal and state marginal tax rates in the futurerange of options in your company 401k.

Florida's laws are much more laxed than Texas but many lenders still exercise caution. 

I know you don’t believe things happen for a reason but this exercise may change that.

This is such a tough exercise because of all the variables, but I think the the buy and hold guy's balance sheet graph could be looking like a hockey stick in years 7-10 if he is a good manager.

Yes the banks are beginning to crack down, but there are a lot of loans out there and there have been very few incidents of the banks exercising the DOS clause, at least to judge by what people are saying on BP.    

They had given you the option to borrow based on their available cash and your financials at the time and then they simply withdrew their option since you were not exercising it and their cash position changed.So, the answer was/is to borrow the full line of credit, before they withdrew the option (or cancelled it, to use your term).

And no, you would not be able to exercise your right - indefinitely.  

Its been several months since I did that exercise, but several areas, Vegas, Phoenix, CA, were still above the inflation adjusted trend.

I went through the exercise not too long ago.