OTOH, its possible the loan has a broader calling clause that gives them the ability to call it for a variety of circumstances, perhaps with no reason at all. 

Right of redemption gives property owners who pay off the back taxes or liens on their property the ability to prevent foreclosure or the auctioning off of their property, sometimes even after the auction or sale has occurred".

Or the ability to copy the keys.

Also tell her that part of your job as a landlord is to assess tenant ability to pay.

Be cautious with sandwich lease options Vanessa, Bill Gulley and I have been talking on this subject for a long time.If you are dealing with free and clear houses, taking title via a private 1st mortgage - installment sale and renting or lease option is smarter than a sandwich.Also on the selling on lease option side, watch out for rent credits, in other words do not do them, consider a ROFR, or right of first refusal, as Dodd Frank, SAFE Act, etc. has come into play.Use a RMLO or Reg Mortg Loan Orginator with your buyers as per the ATR (Ability to Repay Rule) will bite you later if the buyer gets an attorney on a seller financed deal.

Cool graphics.Purchase price + rehab equaling ARV is not the most favorable but I would still proceed if you are confident about the area, the ability to get good tenants, see a good chance for appreciation, and if you are in for the long haul.

I hear a lot about how we can't do them, but no one talks about the exceptions.The new regs allow an individual or estate to seller finance one deal per year and it's exempt from Dodd Frank and CPFB regs requiring a licensed mortgage originator and from ability to repay requirements.

I am so new to all of this and I think there is an element of fear about what to do next.

I have no issue with the DOS, my concern is that people be aware of the issue, not avoid it unless they don't have the ability to pay it off.If you two posters will read what I said it is totally correct.

Bimal, the answer to your questions could all be yes, asking for POF depends, do you know them or is there no clue as to their ability?