Use the compassionate side (trust me I know this is super irritating). 

He’s clearly trying to play a tough guy, but it’s irritating that he decided to play it this way.

I was irritated they didn't inform myself, my property manager, inspection guy, etc.  

I am highly irritated that I paid this company $99 a month to not communicate with me and lead me as they are the professionals.It was 7 days PAST the lease expiration date per the signed lease for the tenants and I had no clue if my tenants had renewed or planned to move.

I have about $120,000 that I am looking to use for fix-n-flip investing in pursuit of a higher IRR.  

Since this rightly irritates me, I'm considering setting aside $30k in escrow then suing my would-be blackmailer for that sum or whatever I'm entitled to. 

Small landlords in particular fear tenant turn over more than the irritation of having a tenant that controls when they pay their rent.

Tenants say they don't mind but in all reality I would expect them to get a little irritable in some way with their unit under construction.Not sure which route to take here.

(partially because I'd love to own in Venice and it's super irritating I can't...)

Your ROI is a number close to infinity and you can repeat indefinitely - And YES - there are still deals out there that will work ... one just closed a couple of weeks ago in The Woodlands on MLS at about 70% of value and only needed light rehab - maybe $5,000-$6,000ARV - 177,000Sold - 123,000Rehab - $5,000Total invested - $128,000-$129,00080% refi - $141,000 Rents - $1,500-$1,600 My initial offer was $120,000 - They declined to counter - Now that I see the final sale amount, it irritates me that I was so close but missed the deal