I strongly suspect your best move is to roll the TSP to a Traditional IRA and convert the IRA to a Roth, using non-retirement dollars to pay the income tax, even if you have to borrow the tax liability. 

You could get a heloc on your existing home to use as a tool to potentially use to buy the lot of provide down payment $.

Does anyone have knowledge of the difference between judicial sales (In-rem) vs non-judicial tax sales? 

It's a strict 2-year requirement.As for strategies to avoid capital gains on the sale, if your client doesn't meet the ownership and use requirements for the Section 121 exclusion, they might explore other options such as:1031 Exchange: If the property is an investment property rather than a primary residence, your client could consider a 1031 exchange to defer capital gains tax by reinvesting the proceeds into another investment property.Installment Sale: If your client is willing to accept payments over time, they could consider structuring the sale as an installment sale, spreading the recognition of the gain over multiple tax years.Charitable Remainder Trust: If your client is charitably inclined, they could contribute the property to a charitable remainder trust, receive income from the trust for a certain period, and then have the remaining trust assets pass to charity upon their death, potentially reducing or eliminating capital gains tax.These are just a few options, and your client's specific financial situation and goals would need to be considered in determining the best approach.

Hard money loans typically come with higher interest rates (10-14%) and often have a balloon payment at the end of the term.

While tenant protections are strong, landlords still have legal recourse to evict non-paying or problematic tenants.

Can you reccomend a book on economics for non grad school types?

Split it down the middle and work it like a true partnership where the interest payment, tax, insurance comes out of the entity.

If you refi to a renovation loan by including the ADU costs + paying off the existing mortgage, would your total monthly payment be financially comfortable and agreeable to you? 

You will have paid off some of the principal as well, but yes that ratio of how much of your payment is interest vs principal changes over the term of the mortgage.