@Marcus Auerbach Thank you for the post I appreciate the clear rational information based on facts. 

Banking on events you have no control over isn't investing...it's speculating....and telling yourself it "might" be a good deal anyway, is rationalizing.  

A Landlord can not rationalize your fears always but I would bring him an offer that you can’t be here if this isn’t addressed after “x” days/weeks.  

Of course the standard issue exist that rationally they should only buy a property that has a higher total return than the one they currently own.

Will this push my debt to income ration too high to get lenders to look at my proposals?

The factors here are several layers deep...1- The threshold decision is rooted in local ordinance and zoning...if you're in an area with tight local ordinances you're fighting with the people that live in the neighborhood before you ever reach the city zoning folks...this can go one of many ways2- ROI on the conversion...you're first stop should be with a local architect...they are worth their weight in gold when navigating a project like this and will wade through the regulatory waters much better than you...and a simple phone call may be telling to whether the conversion would be permissible.The extension of this is the cost of the renovation in relationship to the rents received...the stars would really have to align to say you should spend a significant amount of cash to convert a performing building with 4 revenue streams to serve another function (but there is more to this)...and the cost of construction (and lumber in particular) is 5 fold what it was 1.5 years ago...3- As you indicated...exit...I think the only rational reason to convert a 4-unit would be to get condo status or single family/ shared wall and sell one or both of the units to an end buyer (you are basically paying the role of a speculative developer here)...this is happening frequently in locations like Olde Towne East and Merion Village...hard to demonstrate how successful this has been, but it seems far fetched reasonable consumers would pay the same for a  free-standing SFR they would for half of a "duplex" or condo, but who knows for sure.Either way you look at it you're in a residential appraisal situation on the comparable sales approach....4 unit buildings are still "single family" homes. 

I'm not familiar with the area, but it's going to be difficult to rationalize this property as an "investment" if rental income is just 5200/mo.

For reasons that were more emotional than rational*, we decided to keep the old house as a rental.

They rationalize it ~Rational -lies.Often they use of the myth of the poor stupid seller that has been living in the Himalayas as a hermit for years and suddenly inherited a house, and because the hermit never heard of Zillow or Real Estate Agents, falls victim to the evil wholesaler.Conclusion: Be a person of integrity, but don't be fooled by or discouraged by the phony ethics police because they are either frauds or ignorant or both.

"Living life" is just a way people rationalize not wanting to delay gratification.