They had just paid off a tax sale before we filed our foreclosure so I think there was some confusion that there was actually a second foreclosure.

While I am aware that an SBA loan is an option, I am considering alternatives as we have not yet filed our 2023 taxes and may not do so before applying for this loan.

But if you rent any property, including part of your home, for more than 14 days, then you have to report that income on your taxes.However, based on what you said, you won't meet the IRS requirements (Treasury Regulations section 1.280A) to be considered a short-term rental (STR) when you file your taxes. 

If the LLC you set up was taxed as a sole proprietor then it would not file a tax return. 

If the lease maturity is too far out, enforce the visitor provisions in your lease (mine allows no more than 14 days) and send notice to quit or eviction will be filed. 

The trick here is to get a signed deed and wait to file it.

If they filed a claim (which they did notin that case) how would you protect yourself?

File with the courts.

an idea: on your laptop: create a folder, and in that folder create files by categories, then create as many files, subfolders as you want, keep organized, and you can even search for key words in the future!

***Fake mortgages are being filed against properties in Cleveland and they are targeting out of state investors.