Be gentle.

Use a metal one if possible unless if you are very gentle.

I would add that forced appreciation is appreciation too that is not dependent on market conditions ... and any sort of appreciation can be tapped at any time without selling via cash out refinance ... any market bubble pop tends to be temporary and a small blip in the longterm trend, unless you are not financially stable enough to hold through a downturn or think that prices would pop and never recover, in which case you probably shouldn't be owning in that market at all ... appreciation also shows up in ROI perhaps even as you define it and even without tapping equity as rents increase and if you calculate your "I" based on your total actual costs (based on your purchase price) and not current market value ... finally, I would say that I still care tremendously about long term appreciation and my resulting equity position, even if I don't plan to sell or cash out refinance, as it gives me a whole lot more exit strategies and options, which makes my investment less risky and more robust even if I don't choose to exercise these options ...

. - if nothing else is done, then yes - when the option is exercised the depreciation has to be recaptured.

They are eligible for ROFR only if other conditions are met(i.e paid on time, no damage, non-refundable fee per exercise of it).That way you'll get them to behave well, can price accordingly, and hopefully keep them around if they are good.

You have to be able to gently but firmly get them to face the reality of what they truly stand to lose, solve their immediate problem of where they will live and not make them feel like you are taking advantage of their situation.

If we found a buyer before we actually purchased it who would pay us what we wanted we were going to sell it wholesale.Once the purchase went through we advertised it as a rehabber flip and started the demo.During different stages we added our desired profit and advertised it as a fixer upper.During that time we found a buyer through FB who wanted to purchase it once we completed it.We contracted it to them on a Lease option Purchase which means at some future date they can exercise there option to purchase but until then they are strictly renting it.So all that being said, we bought it at $10,000 put in about $20 in rehab (personal loans for some of this) and sold/optioned it at $67,500.  

@Leah Gober and anyone else: I was thinking a "tabletop" exercise would be interesting.

If you remove the borrower from title, yes the bank can exercise the due on sale if they choose to.

I have found that if you do a good job up front ,  the seller is more likely to finance your purchase when you exercise your opinion .