I don't know if we can get anything back as there may not be much left in the LLC, but at least he should be held accountable and not keep doing this.I read  largest portion of this thread from start to finish. 

In our area, the housing authority does annual inspections to (mostly making sure the landlord is keeping up the units) review the tenant and the landlord. 

Here's my take on the decision:First, let’s look at the pros and cons of paying off your current short-term rental (STR):Paying Off Your STRPros:-You Eliminates your largest fixed expense (the mortgage), which increases your cash flow significantly.

What do you do to ensure that the tenant is responsible for security deposit disputes since that is the largest reason for owner lawsuitsHow familiar are you with the newly changed laws that can affect you the owner if they are not used correctly?.

WE are seeing this in the Portland market.Montgomery Park the largest office complex in the state that sold about 7 years ago for 250 mil just got bought ( after no one bid it at foreclosure) for 25 mil by Menashe family. its over 1 million sq ft.. dont think you can lose on something like that. reminds me of the buys in 2010 in some markets were sfr's were selling for 1/4 of replacement costs..

To just make money is not enough.Michael Gerber, author of the E-Myth  said it best in an interview.  

Are you aware of some actual legal authority that validates the IRS opinion on this issue?

If the potential investor is still not convinced, he states that since 2012,every loan note has been repaid, a better track record over 12 years than any lender in American business history.Source: ( Link, 36:10 )Norada Real Estate Investments, according to the Passive Real Estate Investing website:“Marco Santarelli is an investor, author, and founder of Norada Real Estate Investments ( Link ) — a national real estate investment firm offering turnkey investment property in growth markets nationwide,” ( Link ).In contrast to Norada Capital Management, Norada Real Estate Investment does not raise money from investors.

Being a nutrition and fitness coach, your point below is the largest component that I have seen. 

The leaders of these must gain unearned trust and authority very quickly.