@Lydia S. about 20 years ago there were a lot of houses that had cracks in the foundation and owners filed insurance claims with their insurance companies to collect money to fix settlement issues. 

The roof needed work so the seller agreed to file a claim as I offered to cover any deductible.

If they put the house back on the market and it sells for the same or more, they cant really claim the Earnest money except maybe the carrying cost for the extra time.

He claims there could be an occupancy issue.

They will claim this is a civil, not criminal matter. 

But yeah, once the COVID regulations went in and the federal government claimed that kind of power for itself through the CDC, the outcomes didn't need a crystal ball to be correctly predicted.

But I elected not to claim depreciation on the house and never declared it as a depreciable asset on any business tax forms. 

If the owner does enter into any type of contract with you where a Quit Claim is filed there is the possibility the bank could Call In the loan meaning everyone who has an interest in the property is in a jam and if you don't qualify to get a new loan then everyone is screwed.The only way you can do this deal is through an attorney and a real estate broker is probably your least expensive and best bet.

Now looking back, I kind of want to get a few STRs near Medical Center (yes I know that’s gonna be tough) and theme them out.

Many will lend on the home despite it's condition, and you'd likely have more favorable terms than going the hard money route - especially if you're planning to planning to claim this as a primary residence and move-in.