I would price both and see what is the more cost-effective (long term) solution.  

Having one more thing to monitor and develop rules of use for...In the end I can't justify all of this just to keep a tenant happy.Any thoughts on how to respond to my tenant in a way where I don't have to say "NO", but rather help them reason their way into thinking it is a bad idea as well?

The only solution I can think of is a short sale.

We are feeling stuck right now and looking for any possible solution to this ordeal.

I have endlessly searched and searched for months trying to find a solution, just to end up with nothing. 

We moved to the area in January of 2011 to purchase/manage a 250+ unit storage facility in Rathdrum (North Idaho Storage) I have been monitoring the market since then. 

We also have 25 licensed real estate agents at our firm who specialize in helping investors buy and sell rental houses.Our sister company does all the renovation and maintenance work, which allows us to be a true end-to-end solution for investors who are looking for discounted properties.Since we buy, sell, rehab, and manage for commissions instead of profits, we view ourselves as an alternative to the turnkey model that many companies offer.Personally, my dream is to own many more units across the southeastern United States over the next 10+ years.  

I agree that the solution we offer is not for every investor.  

The first thing I did when I sat down with a brokerage firm was explain my expectations...I plan to invest, I plan to use creative financing, because there is a huge market we are leaving out by not implementing it, and I plan to specialize in win-win solutions (again using creative financing)... if the brokerage could not agree and support my objectives, I would not agree to align myself with a brokerage that I will be paying some of my income yet subjecting myself to lose money due to abiding by their scared rules.

Once again I thank any member in the know who takes the time out of their most certainly busy lives to educate another who is not.Sincerely, Dan Dwyer Wilson Property Solutions