Recognizing that I'll need to discuss options with an attorney, I'd like to have a few alternatives to bring up and talk through with them.

I'd show that GC some renovation options for potential rehab strategies.

Basically my question is just whether or not this is typical and consistent with what you guys would do in this situation.

We manage mid term rentals in Los Angeles and 15% is our typical fee.

These violations are to fix porch, roof, and masonry work. bids that have received are totaling up to $150k.I'm looking to see what options are recommended to finance that additional rehab work needed to clear violations. 

Another question I have is what kind of financing do you typically use to fund your deals?

Presumably, equity will increase, and if all the experts are right, rates will go down leaving you with an exit option of selling or refinancing. 

It is in a small town with few options for rentals available.

I would give the tenants the option of moving somewhere else or accepting the situation.As you pointed out, your "therapist" is using your residential rental as a business, which is a violation of your lease.

lots of options depending on your goals. i focus primarily in knoxville with long term holds and a few flips. my long term holds are focused in 37921 and 37912 zip codes and focus on long term tenants and student rentals. oak ridge has a great upside for long term renting as well as mid term with the lab and all the contract labor that goes in and out of there. happy to pass out some references if needed.