Raised rents on existing tenants to $1150, a little below market. 

Hard money lenders and rehab loans do not exist here, though you can get some renovation funds together with your mortgage.REI meetups are more rare too, and mostly focused on investing abroad.

If your buyer isn't able to overcome the challenges you've faced are you able to service the existing mortgage, pay out to do the foreclosure, etc.?

Have > 2M equity in existing properties I could maybe tap and enough liquid net worth to make a down payment.Expecting to put 20% down.

Certainly.So, I pose this: if you found an existing manufacturer that wanted to sell.  

They run a tight ship on screening and have a almost non-existent eviction rate.

Look far and wide, none exist that will do a rooming house that I've found 

Oregon were i am at is bad with this as well on the resi side.. but on Commercial there is no squatting those laws that resi tenants have do not exist for Commercial you post a 3 day notice and then you can legally enter change the locks kick whoever is in out.. that includes your commercial tenant that is not paying. 

Therefore unless there is an existing use permit that's been maintained through proper licensing you will be required to obtain a variance.

I'd rather spend my 137k in a place that is a proven tourist destination with existing comparable for rentals and resales, that I can easily access when I want to do it and that isn't in an isolated place.