If the T/B chooses to "exercise" the option before it expires, the option fee counts as a down payment.

Most lenders don't want to exercise their rights under these but they might if you push them.  

There are several ways to do creative financing in the playbook but you must exercise due diligence to protect yourself in the event there are liens on the property, etc. 

My first post :) I'm new to REI and followed the shiny into buying ($390) and attending a goofy 3-day workshop (currently sitting in Day 2 in Danvers, MA) on tax lien buying by TAX LIEN WEALTH BUILDERS, previously known as UNITED TAX LIENS, founded by Jay Drexel, who also built MarketPlacePro.It's been almost useless, a giant patronizing waste of time (as @John Underwood and @Ned Carey has driven home - don't pay for education you could obtain more quickly and thoroughly on the googs or through networking), but an interesting exercise in appreciating their polished presentations, sales strategies, and trying to understand what these people's actual business model is by reading between the lines of all the shiny idealized and exaggerated examples of rapid wealth generation.

You'll have to do a bit of digging and exercise some persistence.

@Steven Tenaglia You're both to blame for exercising such sloppy business procedures.

Never count on the tenant exercising lease options. 

If you break the rules of the contract, the lender may exercise to call your loan.

The bank then gets to choose whether they want to exercise the "Due on Sale" clause.

Here's a fun exercise* Look up a rental in an area and see if it would cashflow were you to buy it instead.