If they purchase, the option fee amount paid will be reduced from the purchase price to lower the purchase price on the sales agreement, after they exercise their option to purchase.* The property is not sold and title is not transferred until the tenant exercises the option to buy.

@Dale Walker @Chris Parrish  Basically a free training exercise for the dog, i don't see why they wouldn't unless it comes down to liability.

I'm referring to the standard practice that most people follow most of their adult lives of trading time for money, exclusively.

It used to be standard practice to empty tanks and fill with sand or gravel but that was not an insurance that there was not a leak and that the ground was not contaminated.

Great job, in practice of my calculations you are getting a 6.6 percent cash on cash return from cash in of 40k.

I know that I/we have no tangible reserves at the moment, but we've been hammering down debt like a game of whack-a-mole.Now that we've practically eliminated all of that, I began researching income property.

Of course when it comes time to exercise the option to purchase, then everything goes through the standard purchase process with title/escrow, notary, county clerk, etc...  

This has more to do with bad lending practices than anything else.  

How long were they tenants and how often did you do inspections.It is not practical to rely on tenants reporting issues and falls on the landlord to be aware of and regularly inspecting a property for issues.

practice makes perfect