House hacking is a possible alternative, but given California's high real estate values, investigating other areas may be a good decision.Houston, TX is frequently seen as a favourable alternative for out-of-state real estate investing for various reasons: Diverse Economy, Population Growth, Affordability, Landlord-Friendly Laws, Job Opportunities etcRemember that success in out-of-state investing often involves ongoing communication, local support, and adapting to the unique aspects of the chosen market.Good luck!

Explore alternative options like hard money loans (fast but high-interest), seeking private investors, or obtaining a business line of credit if your business generates income.

In six months, you will have done more research than most on these two alternatives, and you will have your answer. 

Alternatively, what's the best way for my friend to get their funds back without any tax implications (if any) for him and business?

Hey Shane, I'd recommend some sort of short term financing with using your personal assets as the collateral or something besides that specific property as collateral.

Sure, no one has to accept any specific offer...calling for highest and best doesn't mean they have to choose highest and best, just that they're saying they want to make sure everyone has put their best foot forward.

In most jurisdictions when you rent a SFH everything on the lot is included unless specifically excluded in the lease.  

and is this your thought on my situation specifically, being a total beginner?

You're right, a CPA would be able to answer your specific tax questions, but I do know that as a single member LLC, the default tax status is disregarded entity.

What you can do is filter for that specific amenity and see how well booked the calendars of those listings are.