LTV is used when getting funding and the lender, in an effort to keep his/her principle safe, typically wants 65%-70% max LTV allowing for a 30%+ safety cushion of equity.Next problem is your offer process.

For me, these markets provide opportunity for short term cash flow investing or quick turns (flipping), but are not safe wealth building markets (unless you're buying at the bottom of a recession like 2009-2010).I'm not an advocate of cashing out of mature markets, to speculate.  

Besides being on top of repairs and providing safe, clean, quality rentals, we've sent gift cards to tenants when they've turned around things fast after we've requested it, like lease renewal responses/paperwork, renters insurance declarations, etc.

You may (I believe you will) be subject to the provisions in Dodd-Frankenstein and the SAFE Act.

Unless you see a recorded doc that transfers the property from the borrower to the lender, it's safe (relatively) to assume she owns it.  

To be safe the option agreement should state that option consideration will be credited towards the purchase of the property.

@Shelley AltermanI'm talking here with 30 years experienceYou're in Florida and you're an agent and that's awesomeIf you care about protecting the seller I would do a lease purchase versus a lease option and get 5% down and take 3% as a feeI don't know what Florida customary earnest money deposits are, in California earnest money is 3%My advice to you: Create a lease purchase agreement, Florida State lease, and a sale and purchase agreement.To make your seller happy I would take the payment from the tenant buyer and send it directly to the bank if she's out of town, I use www.notecollection.comTo improve the chances of the buyer getting a mortgage I would mandate that they use a credit improvement service like www.upgrademycredit.comIf you leave the buyer to their own devices that won't work on their credit and debt to earnings ratioCredit is very tight right now and you need to find the right tenant buyer has a good chance of getting the mortgage.

The only reason why I might not refinance this loan myself is because there is a possibility that I will work for the government someday (I want to eventually work as a federal prosecutor) and this would make me eligible for loan forgiveness.I think that it is safe to invest in something if you are beating your student loan rate.

Ricky, much respect for keeping the city safe in Lubbock!

There has been significant corporate / institutional purchasing in the region in the past 5 -7 years (Hello, Killam ... though they seem to be focused more on Upper Canada now) and a fair amount of "money from away" purchasing smaller properties in this class (ostensibly as a safe place to park capital at a rate better than what it would fetch in a bonds or money market accounts).