Over time, that approach created a core group of loyal investors who’d call him first whenever a new opportunity popped up.

Kind of like sports star's endorsing a care or something.

Stop hanging out with your deadbeat buddies who spend all day drinking, talking sports, and otherwise wasting away.

You might approach your previous lender and explain the situation honestly but tactfully.

This approach ensured minimal holding costs and a faster return on investment.

This approach undermines the trust that should exist in a lending relationship.

Are there other approaches to balance my goals of reinvesting while being considerate of the long-term tenant?

You can check out their thoughts on how to approach seller financing here: Making Your Primary Residence the BEST Investment Ever (Better BRRRR!) 

I wanted the guests to know what to look for as they approached the property.

You'll want to talk to a local probate attorney to see how much time that could take.If the squatter is not making mortgage payments, you've got perhaps another month or two before the lender begins foreclosure proceedings.In your situation, I would approach the squatter to see inside the property to assess the condition.