I currently have a pre-tax retirement account with employer match and a Roth IRA invested in the stock market.

Younger buyers are still eager to enter the market, and as the economy shifts, there is potential for conditions to become more favorable.

Tell him it's time to do a remod and as a business you hope to market the place at a substantial increase.

It sounds like you've absorbed a bunch of problems already and a new sewer line and the current basement situation will cost you way less than the $50K in fees to sell it. 

Also, if the LazyDog exits at some point, and a new tenant needs to come in - who will bear the architectural/remodelling expenses?

$6k tax.Ins,hoa, not to mention utilities . took out a HELOC off of our personal home ( res.worth $900k, and a 260sq ft studio, mtr. $1450 mo.) for$ 220,000 for the deposit.

Don’t have the time to do property management right now however as I have a full time W2 (accredited investor) and a family to raise. 

Along with a kiddy-pool sized litterbox in one corner of a room, cat urine and feces in the OTHER corner of the room on the carpet (newly installed by the seller when I bought), and a smell that made my eyes water walking in the front door.The lease has a clause for Tenant-Caused Damages resulting from tenant negligence.

My mum currently lives there, she is 80 and not very well, but you would also become a tenant in common and as such if you had the time you could profit 100% from the transaction, as I need cash urgently and am willing to heavily discount the asset.I am wondering if there is a market out there where someone wants to get a foothold in the London market by buying my part of the property.

Her credit isn't the greatest, but she's super sweet and a hard worker, so you are certain it will work out.