I am on my first BRRRR and the issue is lenders keep only wanting to lend on 80% of the purchase price and not the actual appraised value, which would keep my money tied up on the rehab portion as well as 20% of the purchase price.

.#2  MINDSET:  Just like some people will NEVER become real estate investors regardless of time, money, related profession, - MOST people will never become real estate investors.   

I've used Chase for many years for my real estate business but I've had several security issues over the past two years where I've been hacked and had money wires pulled out.

If you’re handy which it sounds like you are, and are able to source and negotiate good deals  (which by being a long time local with an existing social network makes that part easier) then these skills will help you save money on rehab costs and by buying right (critical).

I’d keep it, do a little cash out refinance if you wanted to regain some of the $, and just rent it out or STR it and make some money on it..Appreciation always goes up, and a few years down the line (and/if interest rates come back down you could pull even more $ out Tax free!)

For example, you could use hard money to purchase and rehab a distressed property and if your total owed on the hard money loan is still below 75-80% of the ARV of the property you potentially could purchase for no or little money down.

The remaining $1.2M has not yet been accounted for.I can easily find more investors to fill in the remaining $1.2M, but I was wondering if there are banks that lend money to syndicates that could fill in the last $1.2M at least in part?

If you have a residential earnest money dispute its very different than negotiating a national retail NNN lease.Transactional vs litigationResidential vs commercialThose would go a long way to finding the best referral for your needs 

After visiting the property, we realized we indirectly knew the sellers—a husband and wife who had originally planned to build there.The husband put significant work into the land, saving money by doing the development himself.

Our attorney told me just return the money as the brain damage of going to court and potentially losing (court is really just rolling the dice - small claims court is not about justice and the law but what the "judge" thinks is "fair") is not worth the possible gain.We always sign a lease and any funds paid are first applied to rent and the SD is collected last.