However, on the inspection reports the inspector listed one unit has " a tobacco odor and stains present throughout the unit" and the other has "tobacco odor in unit that seems to be coming from the neighboring unit." 

They might be rude, ask too many dumb questions, seem high maintenance , have body odor, or just give me the Willie’s.

Take note if there are unusual odors in the garage or apartment.

Avoid cats because the odor is very difficult to get rid of if the Tenant doesn't care for them properly.

Should we register the LLC as a Foreign Entity now before tax season or just pull the property out of the LLC with no harm, no foul?

We had to take the drywall (walls) out to the studs & the insulation was also removed & replaced before we could get rid of the odor d'fume .

I would also set up an inspection immediately because I'll bet dollars to donuts there's damage or pet odor inside.

You didnt depreciate so no harm no foul, imo.

The LLC has no claim to the title of the property but seems to be managing it.If the LLC reports the property anyway, no harm no foul (purely from a tax standpoint) since all activity will pass through to Bill and Susan anyway but I'd lean towards this being a landlord (Bill and Susan) / PM (Bill and Susan's LLC) relationship.Thoughts?

Hole in the walls, cracked wall, heavy odor in the carpet of pet urine, and etc.