Any advice on Fixed vs ARM vs Hybrid would be greatly appreciated.

But now hopefully you are armed with more info to ask more educated questions.

I own a digital marketing agency (high stress for sure), make 7+ figures, and have a family of four to support (my wife doesn't work).

I plan to get together with my tax advisor in the next few weeks but I want to come armed with some suggestions.

I worked for a RM servicer for 6 years and only ran into a handful of cases where there was any equity in the property as a lot of the property values were inflated when the loan was originated. 

. $4500 seems like A LOT of money to transfer our digital plans into CAD (the contractor already built-out our design ideas on his laptop's software) and have an engineer ensure we're using the right beams in the right places.

Or at least staying at arms length.

Unless you can provide your private lender with secured double digit returns, I agree with most, your dad may have to do this on his own, or simply have you intern with him on this deal. 

I've seen other appraisals where a short sale was used as a comp, and it was indicated that it was a short sale, not an arms length transaction.  

I would structure this as a 30 year loan at 3% interest + principle with all the proper arms length paperwork.