Your choices really boil down to two categories (1) go it alone (2) invest as partner with an established private or hard money lender.Hard money lenders are often just brokers in semi disguise; they find individual investors to fund the loans they commit to.  

Now that you've committed the money, you own it.

But I don't like the feeling of having to commit to an owner-occupied property that lacks exit options.

I do not believe there is any possible way he will change and you will evict so the sooner you commit to getting him out the better it will be for you and your tenants.

You won't know 100% if they will lend because you don't have the exact deal and they are all different, but you'll have their commitment on that type of deal.

Part of the Navy Creed when I was a sailor emphasizes the words HONOR, COURAGE, and COMMITMENT.

And we are totally committed!

That's not awful, but if you committed your funds in the beginning of July, that's 1 month of no interest (July) and another 6-8 week wait for your first payment.  

Received the title insurance commitment file from the title company in which there is a section called "EXCEPTION".

Victoria,You can form your own but that is a big commitment and getting sound legal advice is just one issue, let along getting in bed w/your family.