IMO that's just as important, if not more important (arguably) than legal structure.

An LLC is a legal entity that doesn't exist at the federal tax level.An LLC can be taxed as a Disregarded Entity, Partnership, S Corp, or C Corp based on number of members and elections made.An S Corp is a federal tax status (that many states also follow) that doesn't exist in the legal world.An LLC taxed as an S Corp vs a corporation taxed as an S Corp is the exact same at the federal level (there are potential state differences).

From my business school days in college, I specifically remember learning that a legal contract is anything two parties agree on, including a hand shake, so I wasn’t too worried about it.

I've never heard him suggest that one way or another I would expose myself legally from under my LLC. 

Explain in the letter that legal action will be taken to reclaim the amount they owe. 

Wholesaling is legal.

Corporations are considered separate legal entities, so the dealer status does not pass through to you as an individual.The other issue to consider is self-employment taxes. 

Trying to evict the tenant, but not sure what loopholes are available or if we should seek legal help! 

Nothing outside of apartment communities zoned MF in beachwood, but there is still a way to rent out a "room" legally in beachwood, and you don't have to do a yearly rental inspection ($500 annually!). 

It really depends.You also have to know if local zoning even allows an additional ADU and if so, can it be legally rented.