For example: you have two investment opportunities, A & B, that cost $1M and $500,000 respectively.

I respectfully disagree and here are the reasons why:In terms of raw CASH FLOW, #4 may be worse than borrowing. 

It's critical to be respectful with everyone around you in the note space. 

No point in keeping a inherited tenant that does not respect a lease.

Currently the outstanding loan amount is $34,000 under the tax assessment so I can use the equity in future property investing.Yesterday an individual from a respected property group in the area stated the house would rent for $1,300 a month (which matches my research). 

Being well educated on finances as well as real estate investing itself is essential to success.It is no different in many respects from buying a car.

People care much more about the aesthetics of their property than saving a marginal amount of money on their already small electric bill.With all due respect.

I am mostly concerned about a visually respectable way to show the division in the two lots.

Give the man the respect his years of experience and net worth would indicate he deserves.  

It's entirely possible that you have a potential opportunity here.A few notes regarding points I've read so far that I strongly (respectfully) disagree with:Current financials on the property are absolutely relevant as the bank will want to see what income the property generates.That said, you shouldn't walk from an investment just because you can't get financials.