On the other hand if you feel the stock market is going to under perform the 6.8% (knowing that the average long term gain on the stock market is 7%) then you might consider paying off the notes more. 

Builders typically are NOT long term buy and hold investors.they build they sell they take their profit and do another new build, rinse and repeat.There’s still a delta between seller ask and buyer expectations on existing property which makes sense.

Am thinking of converting a long term rental to a medium rental. 

Francis, If you haven't, start establishing a relationship with some lenders in your area.

If a market has been flat for the last 50 years, that's a pretty good indication it will remain flat.

Long term friendships with local realtors How did you finance this deal?

My first place to go would be check how long units similar to the one you're looking for are listed for lease.

Having established relationship will help to get better rates too.

You should not be relying on an appraisal to determine what you can sell a flip for.You should be doing your own research and coming to a conclusion of what you believe it will sell for, how long that sale will take, what concessions are likely in that sale, and what type of marketing it will take to achieve that value.

Does anyone have a long term relationship with them who'd care to comment?