Yiu say a few things that don't make sense.

So these clients have a property where investors are willing to pay them $33,333 for each $1,000 of NOI and take their money and invest in an area where investors are ONLY willing to pay $11,111 for $1,000 of NOI at lets say a 9% cap. 

I owed 72k on the first and I got a heloc for 98k or something (65 or 70% LTV).But the previous poster had the perfect reason why you should do that - real estate's true value is in its ability to leverage other people's money - i.e. the bank's.By owning a house free and clear, you're losing a lot of the benefits that real estate provides.1) You have no mortg interest to deduct so you'll end up paying taxes on a chunk of the rental income.2) You'll get no principal paydown.3) Your appreciation on say a 150k house at 3% (4,500) will give you a return of 3% if you put down 150k on it.

For example, let's say a non-disqualified person provides a loan to my SDIRA.

All in all I'd say a California Real Estate License will only do you any good if you intend on selling some California Real Estate.

That has been my argument to those who say a crash is coming.

My questions is, what is the normal protocol when looking for say a 10% cap rate and I find an apartment that meets that, but that cap rate is assuming the current owner is managing the property or even doing maintenance? 

I'd say a good rule of thumb is 25-15% equity should be left on the table for the investor.  

To answer our deed question I would say a special warranty deed. these are most common today in most areas, general warranty deeds are less common.

@Steven Crosby  as long as your actually closing and not assigning the contracts then I think your letter is fair.. if your just using it to enter into a contract with say a bogus pre qual from a HML who will give them to anyone for a small fee or for free then no I think its right back to the old bait and switch routine which is well let your moral compass guide you on what it is.if your closing then I like it.. when I did pre foreclosure work before they basically made it illegal or unprofitable out here on the west coast.. many of the letters I would see in peoples homes that they shared or when I bought them at court house steps people would leave the letters on the counter.if someone is in foreclosure at least in that time period they got no less than about 200 plus letters and post cards.. the ones that make you gag are the ones that come off.. " Mr. home owner I was just like you I too was in foreclosure so therefore I know what you going through.. blah blah blah.. " and when they see about 20 of those with the same message even the dullest tool in the shed can realize 99% of the direct mail are not people out to save the day for this poor unfortunate family.