And this does not include the real world issues, namely are you even allowed to convert this property to a four-unit and taking a single family to 4 unit is very likely going to cost more than $110k (but this depends on the actual layout and work scope).

If they are able to remove the term it will be dependent on the loan underwriting requirements, not because they want to keep you as a banking customer.

As for cash or not I think it depends on rates, your level of risk tolerance, and what the opportunity costs is for that money. 

Depending on your state you may or may not be allowed to accept a partial payment during the process.

Maybe he does file a nuisance mechanics lien (whether he can and precise procedures) will be dependent on local law.

You'll most likely find your staffing costs to be in the neighborhood of $1,200 to $1,900 per unit per year, depending on property size, class, and market. 

But that depends on the level of rehab, price point and so on. 

@Mary Lopez It definitely depends on your scenario and the details.

It really depends what your goals with REI are.

It just depends on your expectations for what looks like a win.