Rent loss? 

I did have one tax ramification that caught me off guard when I got married two years ago: before I got married, my income was such that I got to deduct 100% of my real estate losses (depreciation, etc.) because my AGI only included my income alone.  

Its still losing significant money in terms of cash flow which is typically an absolute no-no.But given you're in california and given your other properties are covering the losses, I don't think this is crazy thinking.  

Perhaps a lease option if the state laws make it feasible?

Meaning what you both want out of the deal, what you will both be making in the deal and what you each are responsible for if there are extra cost or even a loss. 

It doesn't seem feasible though to put 5 people on title and insurance.

Hence, they appear not to be actively pursing foreclosure proceedings at this time.I am kind of at a loss on how to proceed at this point.

So, my plan is to start my management company and to hire agents/brokers to perform the deals since I legally cannot.I can handle the start-up costs but as far as paying the agent/broker, that's not feasible.

But you have a loss on the property.OTOH, its possible that you would need to bring cash to closing and still have a profit.  

If you just want to buy one or two than maybe.The other issue is the higher monthly payments are going to show more of a loss.