Right now, my best advice is to determine first your exact investment strategy (long-term appreciation?

And then drive and determination and money set aside to live on while you ramp up.

Sellers apply market cap rate to their in-place NOI to determine their ask price.

I would have a conversation with the tenant, and then after that if you determine that’s in your best interest and theirs to seek out a new tenant give them plenty of time and make sure you leave amicably because in case you get more rentals and they are looking in the future, I have a higher income that relationship is sure to last, which means that you have guaranteed business in the future.

This is a really hard mental challenge to overcome because you don’t know what you don’t know about other investments.

We came to an arrangement where any sale price over $1 million, minus construction costs, would result in a profit-sharing opportunity.I’m currently trying to determine the After Repair Value (ARV) for the property but am having difficulty finding reliable comparables.

First, I'd determine whether you like to be active (managing your own portfolio of rentals as you are today) or passive (letting go of control and day to day decisions/operations).

Logically we keep telling ourselves, we have the experience to easily make the transition but mentally there's a big difference when dealing with 100's of thousands of dollars on a single fam / duplex and millions of dollars on a 20+ unit property.

So, I DON'T trust my ability to determine someone's character based on a few minute casual conversation and I DO trust my ability to manage even difficult tenants. 

You could have hired a PM and been financially and mentally better off.