These people don't have control over their actions and emotions, which turns into a long, expensive headache for you.I hope this works out for you! 

Trying to get a pulse on this deal because I feel like I am at the point where I really want to go after my first deal and I might be letting emotions get in the way of my judgement.

The trouble is that many of the same lenders I have used over the years are all maxed, I have even made calls to more "emotionally expensive" sources (EX. the types that call you to let you know that they have concerns about shingle color on the house they lent on and think it should be changed, two to three times a month) and even most of those are tapped. 

I prefer respectful clients who can discuss the issues less emotionally. 

Is it just the emotion of it being your grandfather's house that is driving you to want to keep it?

I would encourage putting your emotions about the home aside and viewing this from a strictly financial perspective - Are you really better off in the long run trying to keep this home?

Some of the statements you put in your original post make me think you have some kind of emotional connection with this tenant which is a big no no..

As you can probably imagine, becoming emotionally attached to this home is super easy.

and the letter might be more for someone emotionally tied to their house, not a income property, but hey, no real harm in trying!

"I am leaning toward a $100/month reduction" You are leaning in the wrong direction by allowing emotions to drive your business.