There isn't even a thought or decision here... had they come to you with a heart tugging humanizing story at least there is a chance you might consider especially if you feel the circumstances extraordinary, or be upfront and honest about whatever hardship they are facing and perhaps you have a solution that works for everyone - but a threat? 

MLS is actually a pretty poor resource.

Internet is your friend, but no one on BP can answer your own decisions.

The 2/1 and 1/1 are both rented out with longterm tenants on a month to month basis and below market rents:) I have enough space in the 3/2 to convert to fourplex if I so choose but I haven't made that decision just yet.

Our decision to live in a house at $850,000 is not necessarily ego based, more market based (also you would be very surprised to see what you get for $850k in coastal CA).  

I want to make sure I make an educated decision before jumping to something I know little about.

I understand that you just want to get started but do not let emotion make your decision. 

After reading Rich Dad Poor Dad (I know - the cliche starting point for all of us), reading a few more books, listening through the first 70 Bigger Pockets podcasts all in the last 4 months I put an offer in and bought my first investment.

I am still building the business and trying to grow it but if helps any decision making, so far YTD for 2018 I have earned 55k paid as 1099 SE.Can I get some suggestions on what I should do given my scenario?

If you are going to partner with 20 people (or 1 for that matter) and they are not the main decision makers and doing the "day to day," then you are likely offering a securities and need to do a full offering.