Hi Jay, I think you're thinking of Title III which allows non-accredited investors but limits the raise to $1M in a 12 month period.

I would bet that once you get an attorney involved they will lose interest when they learn the property doesn’t have clear title. 

In no particular order:You might not have a first lien after all - At the closing, is your borrower obtaining a lender's title insurance policy from a reputable agent?

It looks like you're in the game for the long term cash flow so I'd go with the multi-family, but it will all just depend on your numbers!

The auditors/property tax office, or assessors office or a helpful title rep could help you find out for sure.

If that is the case the lender will work with the title company to ensure all documentation is complete and wire funds to their escrow account to close the transaction. 

I mean, here’s my short answer—If you’re new and want to jump in the game, if it was my situation— I’d make an offer below list price, make sure remodel is legit, and verify those suggested rents. 

Do I even need any approval or just a Investor friendly Title Company?

If i was younger, the game plan would be pretty straight forward- go back to school, get a higher paying job, and then save and invest for financial freedom.

If you wanted to get fancy you can play the arbitrage game: You should divert your money to investments if they yield (e.g.) 7% but your loan is at 6% interest rate.