I'd be ok putting money in escrow that can be released at stages if and when part of the job is complete.

Sounds like this property is better suited to be a LTR.You will likely get some unfavorable reviews about the neighborhood that may make your decision for you.

It sounds like you stand to net (before taxes) about $4.3 million.

It's short sighted because it sounds like there is a high likelihood this current tenant will pay. 5.

Discussing these points can help you make a sound decision.I agree wit @Noah Corwick that permitting and construction cost make this a tough option.  

Sounds to me like an investor turned down the deal because after finding out the actual payoff, suggesting the numbers are not investor worthy.

They also want a priority lien on the property.It sounds like you are looking for someone to fund your down payment, I would be looking for an equity partner over debt as nobody likes to lend money in insecure positions, especially when a borrower lacks skin in the game.How much are you planning to come in with yourself?

Hey Dan - That sounds incredibly frustrating, especially after hosting so many successful stays over the years.

Funding the larger properties to start sounds like it will be my biggest challenge and I'm not convinced, yet, that I can't find the money out of my own pocket or find OPM to get a deal done.

Kind of sounds like heaven...