In the meantime can you add extra locks to the basement or someOther method to physically keep everyone out of the basement?

There was no need to get an incredible deal that had to fit under 75% or even 80% ARV through this DFE all-cash purchase method, yet you can refinance all of your initial cash back, and then some.

As long as the borrower is a majority member/owner of the LLC, and the payments are being made, the lender isn't usually concerned...they want their money.Where you could run into a problem is if the borrower leaves the LLC. 

@Joseph Illing You may be able to eliminate this problem through another method. 

They intentionally deceived you, so why is your primary concern their feelings? 

On a serious note you have a right to be concerned.

So, I have read several books and posts on here concerning offsetting income tax with passive loses or depreciation from rental properties, but I am still a little unclear as to how that all works and if I can actually use use rental property losses or depreciation to offset my house flipping taxes. 

This method allows you to reach out to the BP colleague and ask who they interviewed with, who they decided to go with and if they like working with their CPA.

What method do property managers typically bill you? 

It's because those at the top are taking up the majority of the mind share (analogous to market share for any business) and although these agents might be on Zillow too, they've already established themselves through the methods mentioned above.