I like your idea of leveraging your existing POH tenants by offering them the units that you wouldn't want to hassle with, maybe work an offer to give them the units contingent on a certain amount of extended lease time and at the same time bump the space rent up.

Other investors prefer 50%+ POH units and have an array of strategies that justify a high POH/TOH ratio, commonly leasing them on contract to purchase to existing tenants. 

cashother assetsservicesAre any existing contracts of either to be taken over by the joint ventureWho actually does / will do whatWill any external funding be needed?

The most important question you can ask a HML is as follows: "What are the names and phone numbers of three existing clients of yours that have done a deal with you in the last 90 days?"

Does this list still exist?

The biggest issue I see is the existing dry rot and the 60k lien from KYHCA. 

You can't change the terms of an existing lease.

I am less concerned with the bankruptcy if you have had no problems with the existing tenant.  

The ones where a cashflowing house exists

Do you have pre-existing relationship with this money person?