I finally had to have our attorney send him a letter warning against his attempt to “activate” hiss passive ownership interest.  

This created lots of fraud and title company underwriters such as First American sent out letters 10 years ago (I had a copy which I have misplaced since) that buyers must have separate and good funds and cannot use other parties' funds. 

Check this letter written by an Attorney General wherein he reverses a public records request denial based on exemption from disclosure.

So the "story" of why you are buying a SFR rental but also renting yourself should be very clear in a Letter of Explanation.However, these cases can be looked at generally - do you have other investment experience - or is this first foray into real estate completely? 

We have a tenant on a month to month lease that we had given a 60 day notice of lease termination letter to (text, email, and certified mail for delivery).

@Kory ReynoldsWe had this happen and we sent a letter to the irs with a copy of the letter we sent and confirmation of payment to them.

You will need it in place to submit offers, getting your POF/Approval letter, and will avoid delays once you have started the process.

Most people provide recent paystubs and/or a letter from their company HR department verifying their current employment and monthly take home pay.

@Jose RamirezHELOC's are very hard to come by for investment properties, they are also short term loans that are typically interest only with a balloon payment at the end.

Were it me, I'd start with just a legal-ezee sounding "cease and desist" letter, nicely requesting they adjust their camera on the basis of privacy concerns, and I'd be keeping all documentation in case it escalates.