It may also help keep the litigation target off your back.As always, check with your competent legal counsel--not all attorneys speak fluent "trust function and formation".

Our counsel previously advised we are legally entitled to a greater amount including all lost rent until the home was re-signed, cost of lock-out, cost to clean up house, physical damage, ect.For context, this is a solid house in a decent neighborhood and we never had prior issues with the tenant. 

It is the IRS rules around short term rentals.Loophole - A way of avoiding or escaping a cost or legal burden that would otherwise apply by means of an omission or ambiguity in the wording of a contract or law.

I just got off the phone with a law firm doing the foreclosure legal work for a bank.

Haven't had one complaint yet.

Then additional expenses for virtual assistants, legal help, accounting, etc.  

https://www.biggerpockets.com/forums/51-tax-legal-issues-con...

Finally, your hunch is correct: when the syndication cycle closes, your past "free lunches" will have to be paid for, aka recapture.Here're some relevant posts from your favorite site:https://www.biggerpockets.com/forums/51/topics/839015-are-sy...https://www.biggerpockets.com/forums/51-tax-legal-issues-con...https://www.biggerpockets.com/blog/real-estate-professional-...  

Quote from @Anthony Britto: Quote from @Jonathan Greene: You will need egress windows to legally have a bedroom down there.

Looks like previous registrations were entered incorrectly and preferential rents were listed as legal rents.