And if he represents it as such knowing it is not thats mortgage fraud.I cringe whenever I hear "well, its done all the time" which can be true but won't make it right or, as importantly, defensible when things go wrong.

“Redstone has truly become a hub for national defense and security.”

I'm a passive LP investor who works overseas as a civilian defense contractor so I take full advantage of the FEIE(form 2555).

Further, courts have ruled that if Reg D is followed correctly, the issuer has a definitive defense to being sued by a private party.

And why didn't the insurance step in - for example, if my tenant slipped and fell and sued, the insurance company would be the first line of defense if it made it to court.

With delinquent assets, especially ones years delinquent, the 'collectible balance' can be very different than what is promised by a seller due to defensible arguments of Laches and the Statute of Limitations in some states.

Regardless of what happened its going to be an awkward conversation for the tenant to go through, and he will likely get defensive. 

But now that you have made the accusation, you have put me on the defense; because of this, I'm less likely to WANT to discuss the location.

In regards to the insurable interest on the transfer to the LLC, as long as the owner of the LLC is the same individual who is on the mortgage, there will not be any issues with the insurance policy providing defense or settling Property claims. 

It's also got a lot of high paying defense and tech jobs.