Have you identified what avenues you plan to start with on your investing journey?

I definitely learned a lot from this experience and I don't plan on making this mistake again.

Umbrella policies are more of a protection than the LLC from what I've gathered, but I'm always learning as well so could be wrong. 

I am a real estate investor (with a concentration in buy-and-hold properties) as well as a Police Officer for the city and I will warn you that crime is an issue.

What strategy are you planning to utilize?

If they want to live in a well-maintained home, they will comply.

What are your goals for the property, and how many OTA do you plan on listing on.

I would not fund this loan knowing that he intends to make it his primary unless you plan to adhere to the associated regulations. 

I thought I was getting an amazing deal but what I'm ending up with is; essentially locked into closing on house where everyone expected the current tenant to leave cooperatively however, he is now planning to stay indefinitely without paying rent until getting evicted.

A sales rep from that company was saying not to worry about it they won't enforce it and they have seen claims paid out... all well and good but what is in writing is what matters when the lawsuit gets filed.