I guess it's time to hustle! 

My guess would be that the lender is including insurance (PMI, MIP, etc.) and/or taxes in their calculation.

Probably about 14X18, with maybe a 1/4 (or less) of that taken up by the laundry area.It does have some vents in the wall as well, and it is an old house so I am guessing it has some leaks and overall adequate ventilation, but being a basement and the property itself has limited parking so I think it works best as a 2 bedroom.

I guess I want to make sure that what I think has to occur for reclassification as real property, is really all that has to occur.

Yeah, I guess it isn't any different from what anyone who operates a normal business such as a Dominos franchise has to deal with.

@Anan SmithI guess to make it simple. 

But I guess it would depend on how I couch the marketing; I could even offer both options...Thoughts?

I appreciate your input.You’re right it did come across a little abrasive and that isn’t my main intention, so I apologize for that.I guess my main point was you acknowledge it’s not an investment (that’s good, we agree there) but then where we disagree is youre trying to apply investment financing (like seller financing with balloon payments) to something you just said isn’t an investment.Obviously you can do this if you want, but I think it’s a bad idea.  

So I guess my suggestion would be either they come to an agreement for some chump change or they both plan on spending a ton on lawyers to drag it out. 

I guess in a couple of years I'll start getting commercial non-mortgage loans.