Visitors often are one of the highest contributors to local economy with very low draws from the economy I.e. visitors earn, draw and make from their local economy and grow, spend or support the visiting economy.As for morality I think we can all agree that STR are not immoral in a resort ski town because they add to a market which doesn’t have much need for LTR because of lack of jobs but high demand for STR because of the geographical accommodations which provides economic stability, allowing for individuals to reside there outside of retirement or remote working.

Your explanation for why people put one house per LLC makes total sense. 

If there is no explanation or numbers, you can't charge them anything and let them go free. 

I'd recommend talking to a qualified tax professional to get a full understanding rather than just reading a list of possible deductions.When looking for your tax pro, you may want to consider somebody who specializes in house hacking and use that as your primary criteria rather than focusing on geographic location. 

For these ones I came up with a 4-5 page explanation of how the partnership would work, how their investment would be secured, how funds would be split at any given time etc...

You just need a clear explanation about the change and a general timeline of when it will happen.

I've received private messages from local RE professionals in the Indianapolis Community after my original post (on the other thread) describing exactly what you laid out as the possible explanation for this fiasco.

Here's a very basic explanation to get your juices flowing:Assume a house costs $200,000 and rents for $1,500.

I had to do a few letters of explanation for a couple outstanding debts I had.

Get an explanation and go from there.