They're great as broad guidelines, but as you mentioned in your post, there are markets where the rule either doesn't apply or just isn't suited for that particular market.With any investment, you should be looking at the costs, income, and desired rate of return based on whatever your investment strategy and goals are.This is coming from someone who has never used the 2% rule and simply made the investment on a. what it was going to cost me to invest and b. what return would I get in both the short and long term.

Straw buyers are a legal practice as long as it is disclosed with a conventional loan.

I'm not sure it's even legal?

Are these sketchy $400 leases even legal?

You probably need to check this out legally.

Any legal issues to think about?

Being legal has advantages.

You might want to read the following post:http://www.biggerpockets.com/forums/51/topics/60274-texas-lease-options-deciphering-the-legal-jargon

@Angelo Without getting into legal or tax advice we typically have language in our letters of intent to the effect of buyer will assign the property to a new entity created solely to hold the property.

The son is moving to a new city and my tenant simply asked if she could keep the son's dog for a few months while son was getting settled.If it were a small dog, we were inclined to accommodate her because she is a good tenant and will likely buy the house at some point - she has great credit and just needs to show enough self-employment income this year to qualify (IOW, take fewer business expenses and legal deductions).The picture is from the application.