I'm curious to hear from a distance investor (or multiple states property owner), or Lenders that are familiar with this matter that should I form 2 different LLCs in 2 different states?

We are seeing less and less flips in LA because even at cost, construction costs are high.However, we are starting to see some opportunity because the owner users who wanted fixers have either already bought something or no longer have the cash/time to buy a fixer themselves.It is unlikely there is a crash coming in Los Angeles.

Sure, gross negligence by the owner may create some, but that can be easily managed.

I'm really passionate about wanting to become a better RE owner and operator but I know that my lack of knowledge and guidance is holding me back.

There is a reason the units are vacant - most likely because the current owner knows he/she will not get the rents to cover the costs of making them habitable.   

On the books, it's just an owner contribution, the LLC doesn't care if the money was borrowed or not. 

Thanks Brooklyn, I didnt mean illegal by loophole haha though I disagree about flirting..I think we should have flirted much harder to gain us some better rights as property owners :P  

What is the process for the estoppel agreement, switching the leases into our name, not the previous owner, changing the rent payments to go to our account and not the previous owner?

I will see about reaching out to owner.

So yes, its very possible to use a conventional loan to buy an investment property...but you aren't going to get owner occupant rates/terms.