You will probably need to find a lawyer who will take the case and hope to be paid afterwards for his fee's and maybe a small settlement for hardship for her from the state.

So it seems that my sellers contacted wells fargo and told them about the sub2 deal based on their lawyer telling them they had to, so then wells fargo proceeded to tell them that it was illegal and they werent allowed to do it, so they agreed to do a deed in lieu of foreclosure.

I assume there is some sort of contract that needs to be handled by a lawyer, but is there any other significant action I would need to take?

there is a lawyer in town i use for evictions that will give you free advice on how to handle message me and I can get you his info.  

Do I need a lawyer???

With that kind of information he could commit fraud, and he lives in Florida, the Fraud state, with all the fake lawyers and bs going on there.Yes my rant is over, screw this site.

forming my company in the new year, We plan on consulting a experience lawyer in the real estate investing arena .

I'm not a tax lawyer, but if you do education on your way to anything, It is deductible if you itemize.

So as long as I keep my "advertising" to friends and family (pre-existing relationships), can I just give my proposal and presentation to family and friends, and once they agree on something, head to a lawyer to create the note between us?

You don't need a lawyer for small claims, document everything you can and get a judgement...ask for the max, don't discount anything. $3400 sounds low for all that.