I agree it sounds like this would be too challenging and time consuming of a property.  

Joe T. good to see a young guy like yourself getting into in and taking action early! 

Land Development is not that complicated but it can be expensive and time consuming and majorly frustrating.... what you think its going to cost usually you need to add 20 to 30% by the time the agencies get done with you  :)

First let me start off by stating that i'm a rookie who's following the advice of many BP podcast and webinars by trying to take action!!!.

@RaySlack is right you may need to file a quiet title action to ultimately get a clear title.If I were in your position I would also hire a skip tracing service simultaneous to filing a quiet title action suit to find the person.

I would like to refinance them both under a commercial loan in the future and was wondering if that was the best course of action?

I believe your answer could be found on the California Department of Consumer Affairs website: http://www.dca.ca.gov/publications/landlordbook/wh...After reading it looks like you would have to pay an occupancy tax to the state, and provide room service, maid service, etc to treat it like a hotel and kick them out immediately.

I like the no BS, take action approach he promotes.

I think we need to start at the beginning and spill the beans as to what is really going on, an LLC, no personal guarantee, second position or further back, is this to a commercial transaction or a consumer loan, buying from an LLC, there is no issue with the number of liens to be paid off, the issue is the dollar amount and the property value.

Assuming your credit is good.Define your criteria, decide on a market, start shortlisting properties and take action.