You cannot (legally) exclude your capital gain when you sell your NJ house next year. 

If I were managing the property my current legal situation would definitely not have occurred.

First, Andrew Holmes decided to remove me from the program because I followed my real estate lawyer's advice, and "disobeyed" Andrew's legal advice: I didn't file a foreclosure on my paying borrower.

Legal action- no attorney is willing to take this on?

Making the basement a legal unit is costly but can be done as an ADU depending on your exact location (ADU zone maps are on City of Chicago site).

Here's another idea.There should be a legal publication in your area (ask an attorney) that has this info too.

@Zhenyang Jin A DBA is generally not necessary for your LLC in California unless you plan to operate under a name different from the LLC’s legal name. 

I will send you a copy of the agreements that I have and they are legally binding. 

(this was Upset Sale where all liens transfre to the new owner.)I am not an attorney, nor an accountant, nor a CFP, nor a doctors and am not giving legal, accounting, financial or medical advice.David KrulacBigger Pockets Podcast #82

But, this might not exist prior to close.Although I'm just starting out and don't know too much, I would think having your tenants sign estoppel certs during escrow (as @Aaron K. suggested, to which I just learned) is necessary so as to avoid any unwarranted legal disputes.