Overall, a HUD contract is actually a positive for a bank as it is a much more predictable source of income than regular renters.  

I also tell them straight up that they can probably get more money if they list their house for sale with a regular Realtor.  

If you refer back to your contracts/agreements with your tenant buyers, do the documents include clauses about -- a time frame for them to give notice of their decision in writing to you whether they exercise the option or not; your ability to transition them to a month-to-month tenant should they fail to exercise the option; your ability to market/list the property and offer it for sale to someone else; your ability to conduct showings, inspections, appraisals, and photograph the property prior to them moving out if they fail to exercise; etc., etc.If so, then your good. 

@Billie Jo this was more about creating a management co to receive "management fees" that would be established as a S-corp for purposes of employing me and some family members that help me with the business so i could write off employer's portion of FICA taxes and have an ability to purchase group health insurance through the business. my properties are set up in regular LLCs that pass income to me personally as S-corps have double taxation. at least it was my understanding of the tax side.  

When the prospective tenant is ready to exercise the option to purchase, he will exercise his option to purchase from you and do a double closing where he never takes custody of the home but collects a check for his profit from the transaction.  

I just switched from post cards (1 wholesale deal out of 200+ post cards) to letters (Handwritten font, white notebook paper, #10 envelope, stamps, regular mail) so we'll see how the response to that goes!

The lender holds the right to exercise this option, and there isn't anything you can do to stop it.The lenders however, tend to look the other way on these deals.

If he's regularly innebreated and already not respecting the boundaries you have set forth, kick him out NOW!  

Maybe you could hold out for maximum profit on each deal ($30,000 should not be a goal), but why not find buyers who buy regularly, give them a property that is actually a deal, make your money ($3-6 thousand), and have them coming back for more in the future.

There is a firm here that regularly offers "1% - $300" co-op on sales less than $100k - they might as well say no co-op at that point.