Well you have to understand that people tend to associate wealth with being some cigar smoking fat lard with trophy wife and mistresses with big mansions and at least 2 private jets.  

The myth about LLC' is; if something bad happens at one of your properties e.g. some tenants go up in a puff of smoke, or something like an uninsured contractor falls off your roof and ends up being a quadriplegic then you will get sued for several million dollars.

I was always under the impression that when you put plaster over drywall you are supposed to face the dark side of the drywall to the outside???

I have repeat offenders in our area that bop around Airbnb's smoking them out and trashing them, and the name is the only way we can identify them. 

Not many years ago, I was in a devastating financial hole that was more like a smoking crater. 

All the smoke and mirrors is not there for my benefit for sure.

You will have to open walls if they want to inspect.A loft bedroom is a higher risk place for fire since the only egress is out the window or down towards the smoke and fire.

He wanders around all day and night with ten and twenty thousand, smoking Marijuana keeping up with the rents and repairs.

You indicated that if they had informed you of the impending sale, you would have resolved the tax issue.If the property had not been razed, it's likely that some recourse could have taken place but if it's gone up in smoke not sure there's likely to be any meaningful resolution unless you prevail in a lawsuit against a government agency which is an uphill battle.

In contrast, other lenders I know are creative and are true asset based lenders that are willing to look at the true value of a property for the purpose of lending.At the end of the day, credit can be a 'smoke screen' and won't really mitigate your risk too much in todays market.