Does your state regulate them?

This would of course require 3 base things:  1) efficient utilities- a natural gas hookup in this case, 2) a well insulated house (sometimes challenging in the multi units in New England), and 3) implementation of a landlord thermostat to control the heat and regulate it to a range 65- 71. 

While our state has a lease/option regulation, that doesn't mean you can't do them successfully so that owner and tenant/buyer both can 'win'.

I had to look around a bit for info on that one.Although I haven't yet found a definitive legal reference for this matter, it seems that the eviction procedure generally favors the tenant in cases of late/non-payment of rent. 

It can actually get a little complicated in Washington depending on which act the structure falls under and what the procedural history is.Most commonly though the HOA's CC&Rs include a clause subordinating HOA liens to a lender's mortgage.

Having said all of that, you should still consult with an attorney not necessarily to discover the legality of the practice, but to find out the proper procedures and make sure that you are protecting yourself from potential lawsuits.

Anyway don't know if their are regulations for that.So how do people normally do it?

The standard lease here outlines the procedure, but from here I only need to wait another 2 days, and then I can change the locks. 

(This is true especially in subdivision development where the developer must undoubtedly meet requirements of the Illinois Plat Act and any other applicable local regulations before the land can be successfully subdivided, which specific requirements will not be addressed for purposes of this question).On the other hand, the developer could advertise what he does have for sale.

What kind of entity are they and who regulates them, such as a bank or secondary market servicer?