Now there is something called due on sale clause and this can be exercised if title is changed out of your name. 

@Hugh TrotmanYou might try this exercise - but I warn you, it's exhausting.Your goal is to be resourceful and stretch, not yourself, but your network.What can you get your network to do for you?

But finding GOOD lease option buyers to assign to is a much more difficult task, because the reality is that 70% of people who call me on my ads are not a good fit, and likely wouldn't be able to actually exercise their "first right of purchase" on the home after I assign to them before the expiration date.

He keeps the signed deed in a vault in his office until the option is exercised, then he records it with the clerk.

At minimum the tenant needs to be instructed that they must exercise better hygiene, and I would put this in writing in case you have to sue in small claims for damages.

On the flip side, if you need to exercise a lot of control over your investment to be comfortable (ie. be able to see the property regularly, choose tenants yourself etc) and you'd rather have control than free time, then more passive buy-and-hold options may not work for you.

Another question is just from personal experience from those who have bought tax deeds how often do the original owners exercise the right of redemption.

What should be the term for the lease so that it is not considered as a sale at the time of lease option agreement in case tenant wanted to exercise the option during the term?

I think that I'd lease option it out to someone and if it sold, it would be due to them exercising their purchase option.

When I exercise option to sell, does bank take into consideration equity in the property (option price/market value), or would I still need to put down 20% in cash?