In a single-member entity, there are no non-debtor members to protect.

Even if you end up paying 50% in total taxes, you'll have $12K in after tax income that you can use to pay down debt or pay bills.

This is generally the redemption right that most people are referring to when they discuss redemption rights vis-a-vis foreclosure.It looks like Alabama updated their redemption laws recently:http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2018RS/PrintFiles/HB90-int.pdfAs in most redemption scenarios, the most junior lienors are able to redeem from the most senior, but must pay the debts of the most senior in order to redeem.In Alabama, it appears that a transfer of the right of redemption also effectuates the transfer of the interests of the party (the naked right of redemption cannot be separated from the underlying interest): (5) Any transferee of the interests of the debtor or mortgagor, either before or after the sale.

The original debtor is deceased and the property has gone to two heirs.

You could consider doing a bridge loan now (12, 18, or 24 months with no prepay penalty) then convert garage and refi again into 30 year fixed debt (or something similar).  

They had no money to service all the debt or renovate anything.

You are giving up control to this personFixed-rate debt or at least rate caps?

By doing this the tenant’s money is protected from your debtors in the event that you are sued or file for bankruptcy.

Nikko, this depends on how you break it up using private debt or private equity investors.

However there is nothing wrong with little to no debt or being a hobby owner do what you feel is right for you and your family!