Since I was legally required to wait until the 15th of the month to give the 3-day pay or quit notice- and couldn't enforce my late fee or indemnification clause - I decided to pay cash for keys and get the unit back Nov. 8.

It takes a matter of 4-6 weeks to get permits.

Be careful what you put in writing,a lawyer can use it against you in a court of law.The tenant is within his legal rights to demand a receipt for rent paid and the reason is not up for debate by anyone.You must furnish a receipt within a certain time period established by your local state law.You can furnish it electronically,US Post Office mail,or in person.Also,that statement regarding possibly moving into the apartment might been seen by a judge as illegal harassment of a paying tenant.You seriously should seek legal advice from a competent attorney and let them write responses to your tenants with the correct legal language.

Have you talked to the state to make sure this is legal? 

This is a job requiring permits, license, and insurance.

I suggest your respective LLCs be the members of the JV LLC, but check with a lawyer - maybe there're legal reasons to own the new LLC under your personal names rather than under your LLCs.Transparency is easy with a joint bank account.

Just to be legally protected in case someone was there.You are not even sure that the person who texted you is the same tenant.

It's a very gray line and you really need local RE legal advice here.

So if you can get a zoning variance to enable you to use it as a legal office,  wedding venue, accounting office, day care center. 

I'm not a lawyer and this is not legal advice, but I wouldn't want to be standing  before a judge in that person's shoes!