@David CianciYou and @Sean O'Keefe made me create a long answer to your question:https://www.biggerpockets.com/forums/51/topics/1202208-gray-...Also, beware that @Natalie Kolodij's post that was linked on this thread does not really address your question.

Since the upstairs tenant already addressed it with the other tenant we would wait until there is another complaint.

I worry way more about IF they will pay than to what address.

PM me so I can get your address and I'll send you a copy of the book. 

Depending on your address you may fall into the city's jurisdiction which only allows short term rentals for 90days or less in a calendar year, or the unincorporated part of the county which does not have the restriction.

It was closed by the state about 1.5 months ago after the current owner didn't address all the cosmetic violations.

Your CPA's assertion that the insurance proceeds won't be taxable if reinvested entirely into the property is accurate; however, it's crucial to address the issue of depreciation and potential partial disposition separately.A partial disposition allows for the recognition of a loss upon the disposition of a portion of a property.

Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

I know you might not be able to post the address worrying someone else might find or get the deal but without the details, it will be pretty hard. 

How do we know that you didn't want us to address 90% of your post that details how you got into this situation?