I just received a call from an attorney who is apparently representing them and it looks like they are trying to milk the process and go to court so they can reside in the apartment rent free for now.I am anticipating hiring an attorney, but any insight would be appreciated.

You can keep adding cosigners but at the end of the day, it's hard to collect from one without going to court. 

My attorney is still reviewing everything, but has given me the following bullet pointsThe old 3 day non payment demand for rent is now changed to 14 daysA tenant can automatically ask for a 14 day adjournment at court and have it grantedOnce a warrant has been issued, it cannot be enforced for 14 days (changed from 72 hours).A tenant can request a hardship and be granted up to 1 year to remain in the unitLate fees are capped at $50 or 5% of the rent (whichever is higher). 

The court has the resources to help people get involved in that.

In other words, you may have a court case and should consult an attorney.

Verify previous landlord, verify employment, check local criminal court records for their name. 

Google Portsmouth, VA HUD investigation, police chief, city manager, etc. and you will see the drama that is always going on.  

When I found out they pulled an inspection test behind my back, I immediately wanted them to leave.I don't know how courts would treat asbestos cases.

First, real estate law is state specific, and courts will generally ignore the laws of your LLC's state, and use the local LLC laws instead.

I’d be tempted just to eat the $350 to avoid a conflict that could cause me to go to court and defend how I used the security deposit for repairs and why I have a lease that’s been backdated.