We did that for about 3 years until Jeff informed me he'd fallen behind on property taxes, and all of his lenders called the loans due.

Because they know you'll probably never make a claim, or your claim won't qualify. 

There's a self-proclaimed Section 8 guru online who claims he hires random property managers through this website called Thumbtack.

Rents have been pretty close to what the housing authorities advertise, sometimes even a bit higher.Fort Wayne’s a solid spot with low taxes and good cash flow—definitely worth looking into.

@Izraul Hidashi I’m not claiming to know how the entire banking system works but I feel that I have a pretty good idea.

Be skeptical of the developer's claims, as your property's value likely won't see substantial growth until the entire development is completed and sold, which could take several years.

Does she have any legit habitability claims to sue for, especially since she claims to stay in hotel now?

Not to mention the tax benefits it allows. 

People claim that 1031 investors over pay all the time just to avoid taxes.  

You would have to quit claim deed your property from your LLC to your personal name and wait 6 to 12 months, If it was even possible.