I definitely do not condone doing work illegally, however as a country we also have a huge housing issue (and skilled labor issue as I am sure you know first hand).

They are weighing the cost of fighting the "quiet title" issue, what they are going to get at auction, the time frame of getting the property to a sale date and the cost of carrying the HOA fees, the property taxes and the homeowners insurance during that time frame.

So, there could be issues with using that lease to evict in court because there may not be proof that the lease was transferred or that the tenant was shown in writing that the new owner has taken over the lease.

I've never had any issue or problems with wholesaling or assignments or options or double closes, all of which I've done.  

I would want to have the deciding vote on any issues that arise.

Or if she has an ITIN get that but if you run an ssn or itin it only picks up US issues, not international. 

I definitely never thought this would be an issue when I purchased my house.

I know some people who have tenants living above with no issues.

Or should it be on just getting someone in there and dealing with those issues in the future when I go to rent out the main living side?

I’m just suggesting getting tax advice from randoms on BP presents potential issues.