I did the permit runs / checks to assure there was no open permits, but as learning the hard way they did not submit any applications, thus none were open.  

Protected series requires that the LLC certificate of formation must provide notice of the series structure and the LLC agreement must permit the formation of different series.

This can be a very costly and time consuming process involving multiple parties.Then you will need zoning approval, permits, potentially an environmental test and so on.

Any advice for a newcomer?

Unless the previous borrower requests a release of liability, the servicer must process the following exempt transactions without reviewing or approving the terms of the transfer:[...]A transfer of the property [...] to[...]a limited liability company (LLC), provided that- the mortgage loan was purchased or securitized by Fannie Mae on or after June 1, 2016, and- the LLC is controlled by the original borrower or the original borrower owns a majority interest in the LLC, and if the transfer results in a permitted change of occupancy type to an investment property, such change does not violate the security instrument (for example, the 12 month occupancy requirement for a principal residence)."

25% for flood when creek rises, fire, non paying tenant, roof repairs, tree falls on duplex and insurance deductible is $2500, tenant puts toy down toilet and clogs main line, dog which you did not allow bites someone, disposal stops working, property manager 10%, property taxes increase because they see you did rehab or you changed the title, noise fine as tenant decides to become a drummer, trash bill, ants or vermin and you have to hire a exterminator, mold claim, planning department inspection fail, city fee as business, legal fees, CPA fees, insurance goes up, Imperial Beach business license and landlord permit/ annual fire safety inspection/gas co inspection $1500+, heaven forbit the Coastal Commission says you dumped foul water, to name a few

I am grateful to the BiggerPockets community for participating and helping newcomers like me.

2) Back to the "on paper", most RE underwriting only focuses on the OpEx and the appreciation, I rarely see someone includes taxes, which would be some of the highest in the country if you invest in SD, fees (permits, LLC fees, fines from the city, etc.). 

I've nailed it down between two Permits.

If not that, you're probably looking at un-permitted work -- which would mean half the home was built without pulling permits.