Probably based on the owner's existing relationships. 

One end of each bedroom was stripped to the studs for the installation of 3x8 closets that didn't previously exist.

They may need to wait a year or two and show proof the payments are getting made.Realize this does violate the due on sale on the existing loan.  

A dollar amount and the phrase "for good and valuable consideration" may or may sufficient in a transfer of title and may not be the same as described or required in a purchase contract that conveys an equitable interest.Mixing these two concepts is incorrect.When a purchase contract is made, legal title remains with the seller, but equitable title is given to a buyer, full title is in  state of limbo until settlement.Equitable title must be financially measurable, if it is not measurable or cannot be established and is an amount customarily accepted, equitable title may be limited or may not exist.

The credit line has about ten months before interest is charged and thus allows time for investors to pay into an already existing investment.Should I meet with a lawyer and draw up terms of agreement for them to sign?

I'd suggest you look to TREC as to your wholesaling activities and read the forums.Talk to your lender, if you have experience and are otherwise qualified, you can use a blanket loan on your existing properties and the ones you acquire. 

despite the building inventory in some of SoCal there are other areas where building permits are nearly non-existent.

I'm looking at a 3 family building, older home which was converted many years ago. In walking through, one thing that stuck out to me was the absence of hard-wired smoke detectors. The building has no house panel, so ...

Those of us who choose (or are required by our brokerages) to affiliate with the national, state, and local associations of REALTORS© are bound by a code of ethics and standards of practice, and agree to be held accountable by our peers when we fail to abide by these.Obviously, that does not mean agents who are not REALTORS© are dishonest or unethical (there are plenty of reasons, cost being one of them, not to pay for the REALTOR© designation) - but when having a discussion about ethics and standards of practice, I think it is important to point out that these do exist and are adhered to by thousands of professionals across the country.Thanks for bringing that up!

If those systems are old, then you should be in the high 70s, low 80's.Without knowing the address, there is obvious caveats that may exist.