Simply because they know the ins and outs and what your local area requires as far as permits rules and regs also they often time have relationships with local officials for said permits/regs.

Tearing down a property usually requires a permit and inspection for dangerous materials (lead, asbestos) and could increase costs of demo.You might see who is going to take the property, if it's a local bank you might pick up the note by assuming it, (they would just make a new loan for the amount owed and do a sale between you and the neighbor).

Suppose you wind up hating it once you do get enough money to hold a property, and find out you hate dealing with extensive complicated contracts, off the wall zoning permits, multiple tenants, taxes, etc??

We are rolling in Santa Monica and Venice nearly everyday conditions permitting.  

A balloon mortgage is permitted.

i'm fron the east coast and not sure how this works in cali quite yet, other than that obviously the taxes are based on the latest sale price, plus any further additions/extensions/remodels/permits pulled etc.

@MARK MONTANO, keep track of building permits being pulled, and planning and zoning requests.

The permits for this will run you another thousand or so, so you're really looking at ~15k before labor for a small 10'x6' kitchen.

While Quetrock will work for sound proofing, and can be used for fire-rated assemblies (check to be certain your local building code will permit it), it is an expensive solution for fire rating.  

I'm sure the permitting process in King County is rather extensive, especially in Central Seattle.