If you collect any meaningful amount towards what he owes consider it a win. 

BUT I wrote an extensive article on my experience as a Redfin Associate Agent based off of the hundreds of questions I've received in my DMs.

Is the lender counting income from your current 2-unit rental towards your total income (I believe they can use 75% of collected rents as income). 

Look at all the people that bought three years ago thinking that was the peak sitting on equity and collecting rent?

On the other hand some sellers are fine collecting payments for 20 or 30 years. they know the money will be coming in for the rest of their life. 

We could even target the mortgage more aggressively (if we wanted to), and then in a few years sell the home and still collect what's left of that equity with no debt at that time (except perhaps a new mortgage for a new home, but even that's unlikely because we'll be traveling too much as a family to justify it). 

They quickly sign a closing extension.

If you have not already posted your rent via the mail, please call us immediately to make arrangements for us to collect the rent in person.Thank you for your prompt attention to this matter!

Currently my biggest fear is losing capital due to dishonest seller, issues with collateral file causing inability to collect on loan,..etc.   

It's pretty much completely hands off where they do all the renting, calls, money collection, maintenance, lawn/snow care, etc...