Michael,I would suggest you reach out to local investors there in the SF area and ask to grab a coffee, a beer or a meal. 

BP also offers a link to connect with local agents to help you find your investment property.

The 1% rule isn't law and came into existence after the housing crisis but now is harder to find- https://www.biggerpockets.com/blog/1-percent-rule-deadAttend local meetups to find out what the market is doing on a local level.

Hi Debbie,That sounds like a really awesome setup and bravo to the local government to allowing this!

Good for your borrowers who meet that standard.

My name is Dave and look forward to meeting you.  

So, as long as you have at least 5% down AND the second lien meets these requirements Fannie Mae second mortgage requirements  you should be able to do what you are looking to do. 

Hey Zehua, The loan you're considering appears to meet IRA requirements as it's structured as non-recourse to both the LLC borrower and yourself as guarantor, except for carve-outs like criminal activities on the property, unpaid property taxes, and lack of insurance. 

So look into your local and state laws to determine what laws you need to follow. 

. - For greater than 5+ multi family properties the 'best' initial source for financing could be a local credit union or bank.