You can take measures to reduce the likelihood of default, but there's no way to guarantee a buyer can or will continue to pay.Some ways to decrease this risk are: running a credit report, verifying income, looking up past payment history, seeing the buyer's outstanding debts, and calculating a debt-to-income ratio.The seller has the right to regain title through legal action, such as foreclosure or forfeiture, but this takes time and can be costly.

Me, no major outstanding debt and making 3x with a credit score over 640, option 2 sounds good.

Maybe he has outstanding warrants and the problem might take care of itself. 

San Diego long term cash flow is good to outstanding as a function of purchase price.  

Even with the extraordinary appreciation in the past two years, Vermont could still be an outstanding place to consider for real estate investment.

Nobody is going to lend you money to build with the current outstanding lien on the property.

The same goes for owners with outstanding code violations on the property.

However if you prioritize cash flow over extracted value (I do not and neither does most other successful RE investors), you can achieve outstanding cash flow simply by not extracting value

With any outstanding work, temporary occupancy, or open permits, the agent should have written special stipulations that these be completed before closing.

'take advantage of the tax code' to me means taking taking elections that allow you to accelerate deductions.Accelerating deductions should be added back by lenders when you factor in your DTI.So either one of the following things are happening1) Your lender is not adding back certain items to come up with your correct DTI2) You and your accountant are reporting the true activity of your business and it did not increase 3X from 3 years ago.3) Your outstanding debt increased over the 3 years which is impacting the other side of the DTI calculation - Monthly debt obligations.Best of luck