You might want to read our series about “How to Screen a PMC Better than a Tenant”, since selecting the wrong PMC is usually more harmful than selecting a bad tenant: https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

Find out is Indiana allows eviction for possessiona and document all the lease violations and hire an experienced eviction attorney.You might want to read our series about “How to Screen a PMC Better than a Tenant”, since selecting the wrong PMC is usually more harmful than selecting a bad tenant: https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

If you choose to finish the space later, the paint doesn't need to be removed, so no harm.

Knowing it could be re rented with zero vacancy so what is the harm.

I'm getting into the habit of the Funnel concept, of analyzing properties and identifying deals/leads.Thank you for the tips, this certainly helps. 

They can call the city and report you for not having habitable units (no C of O or permits on record) and can refuse to pay rent and you wont be able to do much about it.

You might want to read our series about “How to Screen a PMC Better than a Tenant”, since selecting the wrong PMC is usually more harmful than selecting a bad tenant: https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

with a set of questions asking about their investing habits, their frustrations with investing and doing market research to find out more and refine your plan. 

A habitable house, empty with a fresh coat of white paint, has a good chance of attracting a buyer willing to pay more than an investor.

Only call the cops if there is immediate harm to others.