To make the option period legally binding offer a token option fee (which is paid at the time the contract and option is accepted and is non refundable) which is separate from earnest money which is refundable should the contract be terminated before the expiration of the option period.  

Always raise rent EVERY YEAR, even if its a token $5.

Not sure if you can raise the deposits with a rent increase, the initial deposit collected should have been sufficient regardless of rent increases.Awesome they accepted!  

As long as you're on title for a sufficient period, the lender for your end buyer shouldn't care about the subject-to aspect of the deal.

on the same token, what is the smartest way to prepare for the exam. 

Shoutout to Ken Lau.Sean

@Doug PretoriusJust to be clear, for these questions, are these answers sufficient?

Not many properties can pass the self sufficiency test required on 3-4 units. 

Commissioner , supra , neither the taxpayers themselves nor their agents had been sufficiently active with respect to the real property involved to be engaged in a trade or business.

Would it be sufficient to have the lender call the CPA instead of this person having to risk their E&O insurance to cover your lender's requirements?