He says it's in good condition, could use AC and a heater, maybe some new siding but otherwise in good condition.He has a renter there paying $1600 month to month who wants to stay but has no long term lease. 

Scrub their PM agreement, lease agreement, etc.

My long-term tenant wants out of his lease due to his adult son passing away.

Unfortunately for them, I have sold my house and we are currently trying to locate another 4 bedroom or more home for them to lease.

A Quad is still better due to the fact that you have 4 leases and 4 rents coming in and still can get a conventional loan. 

In the last 10 years we've signed 1500 leases and only had two evictions- those two evictions took between 4-6 weeks from start to finish. 

LTR or Mid-Term RentalIf STR doesn’t work out, consider mid-term rentals targeting professionals, which could offer higher rents and more stability than long-term leases.3.

Perhaps, it is best that we terminate the lease because I can’t continue accepting late payments until the lease is up.  

I have frequently contacted sellers about properties that are off market that I feel pretty strongly that my buyer would be interested in or they have contacted me about. 

This would allow me to create an additional bedroom and potentially live in the basement while sub-leasing the first floor.