Now here's the gray part that you have to exercise prudence and integrity with.  

The exercises are very specific and have been helpful to us.

Also what happens if the due on sale clause is exercised?

Deed executed between seller and Investor 1. 2) Investor 2 puts a 1K option on the house with Investor 1 at a purchase price of 75K. 3) Retail buyer comes along to buy house from Investor 1 at 110K with 25K down. 4) Investor 1 pays Investor 2 40K to NOT exercise the option, 25K immediately and the balance in payments over time. 5) This is investor 1's first flip and will be the only one this tax year.Other than the 1K option money which is ordinary income, what taxes will Investor 1 incur?

I would agree with you on all parts, possibly a daunting exercise...

Lender's decision not to exercise a right or remedy under this Note at a given time does not waive the Lender's ability to exercise that right or remedy at a later date. 11.

A good exercise is to fill out this Preliminary Change of Ownership report (PCOR) which you can find on the County's website: http://www.sonoma-county.org/Assessor/HTML_Documen...It is smart to submit a PCOR with your real property recordings to better clarify your case with the Assessor and any reassessments they might perform.

Due to this, Lenders create Overlays, which are enhancements to Underwriting Guidelines which act as a buffer to ensure the loan has not issues with qualifying for purchase by and investor.

I just can't believe this.MUD finally made some enhancement.

I dont fully understand all the exit strategies one might exercise when buying, holding, or wholesaling raw land.