He was over extended, but just made excuses. 

All of those were extended to 7/15. 

I have a great long-term tenant that has completed a lot of upgrades and intends on purchasing the property as soon as she can bring her own financing(identity theft victim) or I extend her owner financing.Does it make more sense to do a cash out refi or utilize a HELOC?

It’s a pain, but extends the longevity of your property and prospective tenants have always had positive feedback about this.

Your exit strategy can suffer regardless of how you buy if you don't hold long term.

It will be the mortgage holder who suffers the most."

What if the TB does not extend the lease, but instead moves and rents something else, do they forfeit the 10-year option?

If it is a lot of land, out in the country, I'd pay for the difference  (seller usually pays for standard title) and get extended title which includes a survey of lot lines and looks for easements. 

Oddly enough, it hasn't been extended yet. 

I do have family/friends there and have visited frequently but I have not spent an extended amount of time there to deeply understand the culture.