Fannie/Freddie want to see experience in the field, a reasonable budget (we can help with that) and no red flag issues (bankruptcies, history of willful neglect, lawsuits centered around mismanagement of funds, etc.. a slip and fall suit is deemed as general business risk and not held against you).

The main difference between the two is that an LLC provides personal asset protection in case of a lawsuit or financial loss.

Not having an LLC from that State or registered to do business in that State can lead to fines, and, worse than that, if the LLC is involved in a lawsuit, it may be disregarded as it did not comply with the State's requirements to be able to do business in the State.

There’s been some successful lawsuits were tenants sued the landlord for bringing in sex offenders to a multi family dwelling.

Did you know that the vast majority of lawsuits involve security deposit disputes?

SOUNDS like you were preyed upon since you were so close to closing the deal.Definitely consult a qualified professional or two, but it sounds like your legal recourse would be to file a lawsuit. 

He hasn't even demonstrated he can get through a few years of college on someone else's dime; what would make me believe he could deal with real adversity like a real estate downturn, a mass vacancy, a tenant lawsuit, or any of the many other adverse situations possible with investments?  

And it would be penny wise and pound foolish to spend $1000 or so on an eviction lawsuit and eat 1-3 months of vacancy over this even if you could evict (which, again, you can't).I also find myself wondering what you your lease says about late fees?

I want to cut him off my job and file a lawsuit what steps should I follow in New Jersey also any referrals of the kind of lawyer I need please list thanks. 

Otherwise, you the first time buyer are purchasing the property based solely on the sellers knowledge which can come back to bite him when you close and find out the termites ate through all the floor joists and the floors are on the verge of caving in and now he has a lawsuit from a sad first time buyer good luck in court with that one Mr seller.