Hello Doug, I am not a real estate attorney nor is this legal advice.Unless someone's state has specific laws banning contract assignments you should be fine doing the following.  

Sometimes tenants bite, sometimes they don’t, but it’s worth a shot.Owner Move-In: If you’re planning to live in one of the units, you might be able to legally take it back.

I am obviously conflicted with the moral side of pursuing legal action here, but understand that people can do untruthful things when it comes to financial gains. 

Also, keep in mind that if you do self manage, you do put yourself at more risk for a legal issues.

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

Alternative is the sherif evicts him and I pay tax and insurance.I know we can have a gentleman's agreement on these things, but im still afraid he might be able to legally sue me if we have a legitimate residential lease?

As a business, a judge will expect YOU to know all the laws and legal procedures.Make a minor mistake and the judge is unlikely to give you a break and may rule in the tenant's favor.The judge will see the tenant as a consumer and may give them a lot of leeway in court, even give them borderline legal advice.You are in over your head, not having the knowledge to properly handle this.

An LLC is useful for two things: anonymity and legal protection.

We buy at a discount and pledge our legal right to collect the debt (a collateral assignment agreement) as the collateral for the private capital loan we take out, which is backed by the value of the real estate securing the 1st loan.  

@Brittney YangFor the actual legal document, get an attorney.