If done properly and legally you have purchased the "right" but not the "obligation" to purchase the property at the stated price.

Often they are two separate business lines since title companies can not legally practice law - which is doc prep.  

Sometimes sellers tell you rents are below market but what they don't tell you is that their tenants are not willing to pay the higher rent and they have "professional bad tenants" - or tenants who know the system and they are staying in the properties rent free and they are using every legal loopholes to do so.

My wife and I had an FHA home we converted to a Rental so we had to look into it further to make sure there were no legal ramifications. 

Disclaimer: I'm not an attorney and this isn't legal advice. 

@Mark W.Virginia is a very intensive legal state in real estate transactionsI would definitely consider getting my realtor license if I'm going to do this kind of business in VirginiaUnderstand that you can't guarantee that the tenant buyer will get the mortgage and I would have a registered mortgage loan originator look at every single tenant buyer applicationTaxation of option payments are not involved in lease purchase arrangements, they are earnest money agreements, not option money agreementsIf it was a true option payment, the money is taxed when the option is either exercise or expiresI train in leases, options and other kinds of agreements but I would recommend that if you want to do these transactions, you get licensed

I live in Massachusetts and wanted to know some of the most common legal mistakes wholesalers make?  

You have equitable title interests, not legal title.

Since this is apartments you may have legal requirements for pest control.

If the sellers motivation is getting a higher sales price and someone fixing the headache with time, money, and work then they might go for this.No legal advice given.