Besides the property, he has Municipal Utility District bonds that will close in 7 months, proceeds to be used to pay off a loan if the SFR developer is unable to lose.

Some lenders have "float downs," but typically these are lenders with high "starting" rates to begin with, they're just cutting into excess profit they normally collect, it's not actually a float down even though it appears that your pricing gets better.So if you're getting a good rate, expect not to be able to float it down.

You can do everything right on your analysis and still lose money.  

Excess heat and condensation can cause major damage to your roof and roofing materials."

Justify your price drop by explaining how much it would cost to clean up the property, how much it's losing every month with low rent, etc.

A reasonable range would be 5.5% - 6.5% if you havent been quoted yet.I suspect you'll be losing about $200-$300/mo. on this property.

@Phyllis Davenport OK I just noticed you are a newbie; let me add that it is risky and even experienced operators can lose their shirts!

Stop now before you lose any more money. 

OR, do I sell now, collect the 2-300k and run for the hills, all while losing a place that I will probably never have the chance to own again.

However, if I sell I will be losing out on possible appreciation and paying down the mortgage.