Additionally, the longer you wait on paying them off, the more interest accrues.  

In Colorado, I can do all of my classes and such online to accrue the 168 hours needed, but I then have to go to Denver and take the state and federal tests.

I'd have a considerable amount of equity to leverage for another property.However, if I understand correctly, you're saying that it would be more beneficial to just run a positive operating leverage while making minimum payments, and then after a year or two, use the accrued equity to leverage into another deal?

Sometimes ( ask me how I know) a state tax sale can occur at the same time - and this investor can actually foreclose on your home after 18 month or so - and take your house, with his lien accruing 18% interest - when you think you own your house without liens!

Is there any way for him to get out of this predicament without them seizing everything he owns and potentially all of his accrued equity with it (including his own house which is paid off) ?

Have you estimated capital expenditures and what are you accruing each month for such expenditures?

There are many other factors with rental property you may want to consider such as depreciation, accrued equity, and appreciation (I don't count on appreciation) These are more future benefits and not as instant as month to month income.

I agree with Percy N, you probably need more than your estimated 4K and don't forget all of the holding  costs that can add up quickly such as water, electric and sewer bills, taxes accruing, insurance, ect.  

Go make money and undertake protective measures that are proportional to the amount of wealth you accrue.  

In order for the transfer of rights to accrue, there must be a will of a deed executed in favor of the survivor.see ( lawdictionary.org )