Consult with competent legal counsel to guide you regardless of your choice here.

He has a knack for making bad choices. 

I bet both Columbus and Cincinnati made the list. 

If not, ride out the 12 months with the hard money lender.People have to make good choices and not over extend themselves just for the sake of buying something they really can't afford or that doesn't make good cash flow.

You have a few choices, right. 

Nothing is a sure bet.

Numbers don't lie and in todays world I don't know any investor given the choice who would want there money tied up in a mortgage with this  as a viable alternative to have liquid damn cash.

Well the bet I'm making here is that CapEx and repairs will be very low the first few years (honestly event he first decade), and once all the construction ends I will be able to increase my rent closer to market rent at $2k which will give me a better cushion.

You are the owner and you make your own choices when it comes to your property.

I wouldn't bet my life on 50%, but I would bet they are more problematic than the typical long-term renter.