Even more to the point, I made the cold calculation that It was also always more lucrative to spend time on my business than trying to figure out how to win a few % points on my savings and/or worrying about it.

But you can't win unless you play.

Your best bet is either find a lender who specializes in that range such as auto/boat/motorcycle, etc. or you have to go to the usual advice of a local credit union or bank that will lend from their own books. 

My question is how would you handle this situation and the safest bet?

I'm betting they dinged the walls a bit when they moved in (which happens). 

With funds going into the project from the tenant it sounds like a win-win

Unless o course the renter wins the lottery and buys the big house. 

And maybe they win the suit. 

That’s the best bet.

But the good news is you can gain skills and experience, making you a safer bet.