I’m asking because my preferred route was to go with no banks to eliminate time and more paper work.

The new measure would eliminate this exemption and extend regular rent control laws to all multi-family properties. 

It completely eliminates the need for escrow.

I'm still trying to understand how this eliminates any draw requirements.

Look up the addresses and you will start to see patterns, by the time you get 5 or 6 pages in you will start to be able to eliminate some before doing extensive digging.

Good management and communication will eliminate nearly all vacancies, which would be the only possible concern during a down market. 

We also have a primary home with over $100k equity (5 years in possession) and are considering selling one or both to house hack a multi family and eliminate or significantly reduce mortgage.

Having that would help in eliminating areas that don't cash flow.  

We don't know where they came from and nothing seems to eliminate them. 

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.