In April, I was ready to pay it off—only to find out they had transferred the loan to Fay Servicing LLC without notifying me.

She suggested then that in order to be able to maximize our potential deductions we should either become an active Realtor or put the property under an LLC.I've read in several posts here in BP that transferring a property into an LLC doesn't necessarily improve our tax situation.

Again, you friend needs to get to an attorney.Lastly, your friend is not looking to have title restored to him as he never likely never had title since generally title cannot not pass under a forged deed unless the deed transfer has been recorded in a Torrens title state, he's going to ask to be paid back for the value of the improvement. 

I plan to go to a 2 year community college to dodge debt and loans, than transferring to a 4 year.

You're in a unique and potentially very advantageous situation, and it's great that you’re thinking through creative ways to structure this transfer.

I would hire an attorney to do the transfer of title for I figure a few thousand dollars at most.Any other observations about how to proceed to possibly agree on a fair price and buy this home, so that all feel good about the transaction?

Why are you transferring title right now?

The LLC is a separate entity and if you were ever sued over something that happened at your property, the liability is typically limited to just the assets that entity owns, versus your personal assets.The one other thing to keep in mind is that you had the idea of buying in your own name, and then deeding the property to your LLC, there is a slight risk of your lender calling the loan because it was transferred to another name.  

Since my bank account had no funds (I transfer them fully as soon as rent collections deposit), Baselane basically paid those refunds from their own pocket and now are coming after me to recoup them.

Were the transfers from the tenant credit card or ACH transactions.