You need a way to frame this so it's good for both parties.Remember: Pigs get fat; hogs get slaughtered.

I have been researching articles and blogs for the last 18 months now, I eat breathe and sleep real estate, I'm VERY ready to start but I made an agreement with my wife that I wouldn't start a project in investing until we built our own personal house first, I need to focus on my electrician license which has an extremely difficult test to pass (35% pass rate) and we are focusing hard on debt reduction.

I read that they get a reduction on the total assessment of their property by 1/2 the median homestead in the area.

Any reduction in value comes out of the equity. 

Since you paid for appraisal the report is yours and you can present to seller to ask for a reduction if the original value came in lower.

@Patrick McGrath-One of my tenants requested a reduction due to hours being cut...blah blah.. 

You got it.The IRS interprets either boot cash or a reduction purchase price to be a taking of profit.  

If most people could put an extra $25,320 in their pocket in the first five years of owning a rental property, they would do it regardless of the reduction in principal.Now, take that same loan with a 30 yr amortization at 7.5% is $699, but take into account the biggest game changer of all; qualification.  

That said, I still pay about $1k/mo out of pocket(including utilities for the building) to live in my 3 family BUT that same 1k is the exact amount of principal reduction per month.

If neither of them want you to pay them off fully, you could possibly pay them for example $20,000, but obtain a reduction in principal balance greater than that, say $22,000.