There are tons of varying opinions on compliance for the small time investor.  

Yes, just simply find another bank...They can have concerns in giving you that second loan because from a compliance standpoint it can look shady if they were ever audited, or if you went into foreclosure...Usually banks aren't that paranoid if they know there is no shady business going on...Someone who is purposely looking to buy O/O just to get cheaper rate...There may be guidelines from the lender they sell the loans to that stipulate 12-months seasoning on any O/O loan before they do financing for another O/O home...But usually only applies to that bank or lender.With Banks so competitive to get more business, you will be hard pressed to find another lender that will turn down the opportunity for a new loan!

There is one more that recently went off market that I would like to try and put an offer together on that is a commercial multi but needs a good chunk of rehab.I know there have been some interesting posts about subject-to triggering the 'due on sale clause', but for lease-options should I run into that issue?

My guess it ends up getting a house built, so long as things like setbacks and impervious surface area (zoning matters) can be in compliance. #10 You already gave the answer, so no guess needed. 

I've found that even with the situation starts badly, cooperating with the inspectors and showing you really do want to do what they consider the right thing will usually bring them around.The zoning part on the first page says you're in compliance, but that no more units can be added. 

In the end, this is a business transaction.I am aware that in subject to deals, that a lender can call it due at any time, but is this more likely to be triggered by the death of the original borrower?  

@geraldk I love the Kirkland market I used to work in that area, and came a cross a deal that I wish I had pulled the trigger on.

@Eric Black sounds about right.best thing to do would be to run the two scenarios in a spreadsheet, based on different refi interest rates.in that manner you can figure out what interest rate should trigger you to immediately refi, at any given point in time in the future.  

Bank appraisals don't have much if anything to do with taxes assessments so whatever is going to happen would not be triggered by a refinancing appraisal at least not where I have lived.

If it doesn't have at least 50% equity, it may not be worth pursuing and would come off your hot list.If it does have merit, you need to begin identifying the catalysts or triggers that would motivate the owner to sell.