I recommend you become a student of that homepath website and try to document their behavior, like you are Jane Goodall watching some gorillas.In my area, they drop the price about 7.5% every 30 days the house is on the market for the most part, almost like clockwork.

I'm not sure it's even legal?

Are these sketchy $400 leases even legal?

You probably need to check this out legally.

I would make sure you check your HOA documentation to see if you are even allowed to rent out the property.

I'm thinking not, but you've got to read all the contract documents, and the terms you agreed to when you registered.

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.