As a result - the investors of the fund should get a California K-1 that is blank and they should not have a filing requirement with CA.

With LT you have your typical maintenance of course and finding new tenants on occasion when a lease is up etc...

I would also highly recommend doing some more multifamily specific research - some good resources are @Michael Blank and Joe Fairless' websites:http://www.themichaelblank.com/ (more of a focus on raising money, which it doesn't sound like you're trying to do?)

@Gino Barbaro has a good post about calculating value @Brian Burke has a good post about understanding risks in multifamily investing..I generally see good feedback from the BP crowd for Micahel Blank's Syndicated Analyzer for a reasonable price.

The Springs are nice as you could treat as fully absentee but still drive by on occasion to see in person.

I'll point-blank ask them to take a look, see what I might be overlooking, if estimates are low or high for certain areas, etc. 

That may sound insignificant, but when I've had my business name plastered on my vehicle for a decade, seeing a blank tailgate is truly enlightening.

My experience has been, these "First Time" or "Income Restricted" Loan offerings by various State and Local Agencies are all done through a Typical Lending Company (Mortgage Banker / Mortgage Lender) that has qualified with the Agency(s) offering the program.For Example, if you met the criteria for a "Texas Vet Loan", and were qualified for the program, all the processing and workup of the Loan package will be completed by Blank (Generic) Mortgage Company.

Albeit, this is my second (might as well be first) experience using something other than an automated "yes, no, fill in the blank" tax service.

I think I annoyed my realtor on occasion as I have gotten used to self service through an attorney.