@Mark Thiel This is not legal advice but I think most LLCs are overrated unless you are required to have them for lending like with many DSCR loans.

I am not a lawyer and this is not legal advice.

I know I will need to get some legal advice, but I am really looking for some input on where I should even start. 

.: I would reply to his threat of going legal with the final punchlist you're requiring to release final payment.

You can do a subject to transaction but that is not legally assuming the loan.the banks got rid of assumable mortgage long time ago. 

Hey,If "building class designation" is the same as zoning, then this seems like it can definitely be appraised as a two family, with both the legal and actual designation as a two family.Depending where in NYC, that may not help your valuation, as primary residences sometimes sell for more than investment properties, so check that out before challenging the appraisal and definitely before paying for another one.Double check all this with your lender/broker as well.Best of luck!

That will dramatically change the nature of the wholesaling business with the legal compliance factor that agents need to comply with.

If the seller is trying to avoid legal issues with the city for illegally operating a property I would get out of that.

Here in Michigan you need to be licensed as a real estate agent or broker to be legal.

Take control of the situation yourself, and if you want her out, then give proper legal notice.