I'm making the downstairs into an apartment for myself and then renting out the remaining 3 bed 1.5 bath  upstairs. 

We went through a mortgage broker Axia but the underwriting is being done by First Hawaiian Bank.  30% down required, and because the lease has fewer then 30 years we're financing over 22 years (27 years remaining on lease, bank requires remaining years - 5). 

It will be some percentage of the fair market value of the house or the unpaid principle balance remaining on the note, whichever is less.

For now I'm  paying off my 2 remaining seller financed apt bldg mortgages.

We go to the court house and look at what they owe or if loans were satisfied. 

There are valid reasons for both sides of the argument, however in the end, the decision remains by you and only you.

Pay Off Lender: $49KPay Off Investor: $16K ($2K profit)Remaining $1K goes to an emergency fund for the property.

My advice is not to do the parking right now, because I can pretty much guarantee that within the next year or two something will come up on the property that will make you wish you'd saved the $3500+ in reserve for higher priority items.Keep it on the "nice to have" list and just deal with the current parking situation until you have so much money that you feel you have some left over for improvements after all the necessary reserves have been satisfied.

The remaining value will be subject to 40% taxes.  

But no, I guess he doesn't want the remaining 20% of the work if he's not making an effort to make this right.