:Hey guys - I'm hearing conflicting advice on what lenders to go with for investing out of state.Is it better to go with a lender who is local to the area of purchase?

However, the lender's attorneys advised against proceeding with the loan, as it could potentially conflict with Fannie Mae's guidelines.

I'm getting conflicting opinions from my contacts.

I have conflicting views on that.

They may or may not want you represented by the same legal counsel but their lawyer might be able to provide you with a referral if he/she felt there could be a potental conflict of interest. 

I have found conflicting info, that doing this could cause me to have to pay state income taxes on the entire LLC income.

If you are not a CA BRE licensee, then you don't have a potential conflict of interest to protect.

I know it depends on the individual but I'm staunchly in the owner camp for the same reasons as @Bryan Otteson and @Theresa Worsham.I'm a non-confrontational person who hates conflict but, since my policies are fair and logical, I have no problem representing them as my own.

Am I able to solicit "friends" on Facebook or LinkedIn or biggerpockets for that matter without risking SEC conflict.

So, they have a conflict of interest in waiting for the right tenant.