However if they stop, commence foreclosure right away (after default) which will force their hand.  

You will have to make the proper election or be reverted by default to partnership for multi member, or disregarded for single member LLC.So if you question is, what is the tax advantage of a single member LLC taxed as a disregarded entity, the answer is none as it is disregarded, does not file federal tax return, and will revert back to its sole member like it didn't exist.

However, there are risks to that much leverage, such as default on your loans.  

If you do not after 4 months the property will be in default and you will not be able to sell it to the next party. 

I believe his argument was if the property was a rental and had equity, then the performing note was less likely to default because there would be multiple sources of revenue.

What recourse do you have if they default?  

Liability is the default.

Usually they have the lowest default rate historically percentage wise of public traded and rated companies so lenders tend to give the best loan terms on them.

He failed to appear, so I won by default. 

The repayment terms for a 401k participant loan are equal monthly/quarterly payments of principal and interest (typically prime plus 1%) over a 5 year term (longer if used to acquire your principal residence).Please note that if you take a full $50,000 and then pay back the loan, you can't take another $50,000 until 12 months after the first loan was fully paid back.Per the loan offset rules that went into effect with the 2018 Tax and Job Act: if you leave your job and the loan is current at the time you leave your job but then the loan goes into default because you left your job, you will have until your tax return deadline (including any timely filed extension) to make the loan current by depositing the outstanding balance into an IRA (and thereby avoid the taxes and penalties that would otherwise apply).