First, I need to learn how to protect myself and my current tenant against some of the issues I've seen online where renters will stay past the date they're supposed to leave.

Do not use a program for your computer when you can use an online rental manager for nothing.

I thought with DSCR loans it made a big impact, regardless of the property type.

I think you may want to start of the arrangement in a more simple fashion.Ask for a loan in which he will get a stated return 6% to 12%.If you are both successful happy with this arrangement, upgrade to a partnership.I think a partnership off the bat makes things complicated.You will also likely make more money in a loan agreement if the project does well.

(Yes, I know everyone wants to sit out their high horse and say to get permits but it's different when you are eating a 12% loan while waiting for someone to check your project).Have you spoken to the city about what type of permitting you need? 

Any recommendations for lenders who have a loan product for a DSCR construction loan?

Looking at online calculators, a rough value of it is currently 155,000.

I have $50K in debt with a payment of about $1220 in a consolidation loan that will be payed off in 3 years.

Needless to say, I explored further by pulling up & printing all information and pics online pertaining to this property & even got in touch with the real estate agent who sold my friend this house to find out some info about the Granny unit I live in & if it was truly built without a permit.

Hard money loan through community bank.