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.

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

So essentially depending on your timing you will need (2) things in your favor to do that lower rates, and enough equity.In some cases having an interest only rate is not a good thing because it can and it does create comfort which can lead to bad habits of not paying the principal down.

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. 

Coming from the buy and hold side of investing, I'm very focused on cash flow, cash on cash, and then looking at the other ways that I value a deal (appreciation, principal paydown, etc.).  

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. 

File with the courts.

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

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.