In total, including money lost from rent, legal fees, and repairs, the situation cost almost $30k.

Note that legal and transfer costs are not deductible but can be added to your cost basis.

Will the title company put this property under our LLC name, and won’t be required to legally inform HUD/tax authorities. - will it influence property taxes once we move to conventional loan in 3 yrs? 

Or a legal perspective?

The real prohibitive costs come from the legal, compliance, and reporting requirements of registering a security.

Much better than a legal filing or media attention. 

Your client should consult a real estate attorney to draft an agreement with the ex and ensure there are no legal or tax issues, especially since this is an investment property.

Seek legal advice, however, what I understand is that there are really two way to wholesale that is legal in the state of Arkansas.

It seemed like most the folks you have on staff are CPA or other, but no specific legal experts.

Lending capacity should only matter to those with large borrowing needs and require large legal lending limits but that wouldn't apply to hard money lenders anyway.