It is a little more risky though since it is possible that the tenant might not exercise the option.

Person has contacted me as a hard money lender to exercise the LO and purchase it outright. 

And once you find out what that rate cap is, you have to understand if the deal was underwritten to that rate.If the deal doesn’t work at the maximum rate allowed in the cap, then the deal doesn’t work.Debt TermsAnother aspect of the debt that investors should understand is the term of the loan.Forced sales are another big item you want to avoid at all cost when investing, if there’s a balloon payment coming due within a few years, we want to understand what the extension options are for that loan.A popular format might be 2 + 1 + 1 which means the initial term is 2 years with the option to extend for 1 year twice.There are typically fees associated with exercising these options, but the fees are significantly cheaper than being forced to sell when you or the market isn’t ready.Having rate caps, underwriting the deal to those rate caps and confirming they still work, and having loan extension options are 3 things that great operators should put in place to prevent catastrophic deals, and something you should vet for as an investor.

My hope is that after this exercise, I'll be able to make an informed, comprehensive decision where to focus on more detailed property level analysis. 

We are just trying to exercise our options & do our research.

@Ulysses Pagan it is cool that you went through this exercise.

Keep in mind using it should be a relatively short-term exercise especially when it's tied to your home.   

For a fun thought exercise, I'd look at what kind of a real estate investment you could make with a $55,000 investment. 

, and weren't trying call it due/exercise Due on Sale clause.

Kiyosaki's lawyer say the same thing - I signed up for RichDad coaching) mentioned that in his 20 or 30 years (can't remember which he told me) he has never had any lender exercise the due on sale clause in this instance.