When I asked him why,  he says that Earthquake insurance policies are all by CEA (California Earthquake Authority) which is privately held.  

They mortgage is currently being held by a private lender.

The top of the contract does have a statement signed by the Treasurer's Office similar to warranty deeds I've seen certifying they have examined all records and there are no liens, titles held by the state or other individuals, and that the taxes have been paid for the previous 5 years. 

Welcome, Little bit about me, I have been inspecting properties for 3 years, I am BPI Energy Auditor certified, Internachi Building inspector certified, Leased residential homes for 2 years with Renters Warehouse, held a real estate license for 3 years, did 3 years of residential HVAC work, hold a residential HVAC diploma and EPA certifications. 

There are differing opinions on the the ability to amend your LLC Agreement to include the purpose statement with a retroactive effective date, but it certainly gets more difficult to justify if significant time has passed.Assuming you actually have gains within 180 days prior to the date you invested your money in the LLC, and assuming your LLC met all of the requirements for the properties to qualify (purchased from unrelated party, meet the 50% "substantial improvement" test, etc.), there are some that could tell you that qualifying your existing LLC could be an outside possibility depending on your tax risk appetite, but I likely wouldn't recommend especially if you have already filed 2018 tax returns. 

You will for ever be held hostage.

I know the person has a very good job and has held it for nearly 15 years. 

If you are borrowing against residential properties owned by a holding company, all shareowners of the company will be required to personally guarantee the financing just as if you held the property directly.  

If there are claims of discriminatory practices, the property OWNER is held liable for the property MANAGER's unlawful actions.Yes, there is sensitive information (SSN, credit reports, identifiable information about minors), so the PRINCIPAL/OWNER is liable for any mishandling of that information. 

Held more than a year.