At the end we decided not to buy in that area.

The truth is, there is no ideal investment strategy, but knowing what you want to get out of it, the capital you have available, the time you have available to invest in the research etc. can help you decide which way to go.Keep asking your questions in the forums!

I’ve found that local knowledge of an area is a huge advantage when it comes to deciding what is or could be a great investment even in a hot market.

2) How do we decide what to charge for the option deposit?  

Thank you all for your input - I'll forward to my client and see what they decide, much success! 

I have decided not to respond to his communications until he takes any further action.

So I own two properties currently (free and clear) and may be picking up a third soon, which I plan on paying for in full at closing.One of these properties I currently own is our house, the second is a warehouse (w/ 2 bays as a rental) and the very likely third property will also be a 2 bay warehouse rental.My wife and I would like to move into a new home somewhat soon, but this potential property came up all of a sudden and I can't see a reason to turn it down.So hypothetically, let's say we get this third property in a month and in 8 months we decide to go for the new home. 

So I own two properties currently (free and clear) and may be picking up a third soon, which I plan on paying for in full at closing.One of these properties I currently own is our house, the second is a warehouse (w/ 2 bays as a rental) and the very likely third property will also be a 2 bay warehouse rental.My wife and I would like to move into a new home somewhat soon, but this potential property came up all of a sudden and I can't see a reason to turn it down.So hypothetically, let's say we get this third property in a month and in 8 months we decide to go for the new home.

Both units would rent for a combined $2200/mon when I decide to move out.

Plus I've decided the next house I live in is not going to require ANY WORK!!!