Thirdly, in my opinion, funding 100% of the project constitutes significant risk and warrants a percentage of profits, without assuming any responsibility for further downside.I do see the risk that you point out, though, and I"m going to have additional discussions with my attorneys who have significant experience with private lending.

Fannie Mae, Freddie Mac SBL, Private Money, Commercial DSCR loans, Local Commercial Banks etc.. 

Private investors offer profits or fixed returns, while hard money loans are short-term loans.

While most private lenders typically have seasoning requirements ranging from 6 months to a year for refinancing, even with a DSCR loan, there are some lenders who don’t have any seasoning requirements at all.It’s definitely worth exploring your options if you’re looking to access your cash sooner.

I would like to use it as collateral to borrow 42k from a private lender, interest only payments in the 8-10% range for 12 months.

If suspected/in doubt, I would terminate rather than stand the chance of something hitting the fan and having my property labeled a "nuisance property."  

I’m not an expert on this matter, but I don’t think those labels are 100% accurate..so I think it’s possible properties can get this label and not actually be in this status, or maybe it’s a label that’s been stuck in the property from before she inherited it.You’ve already checked taxes and mortgages.

Understanding the Key Differences Between Private and Hard Money: Pros, Cons, and When to Use Each

The other deals I have are private money but I still usually have at least one deal with them going at all times. 

What additional services or support, beyond financing, do real estate investors value when working with a private or hard money lender?