You will also find the people that want to walk away and put the situation behind them. 

I'd love to develop a clean, open, legal, and comfortable win-win situation for these sellers. 

we are in a similar situation right now, getting ready to invest in hopefully single or multi family homes and also have many questions regarding setting up LLCs for asset protection and are at the point where we also want to meet with an attorney....what did you end up doing if you dont mind sharing?

Here's the situation, we are in the process of taking down a property that also includes a neighboring vacant lot.

.- number of units (in the case of MF)- location of real estateThe investor has to decide what mix is optimal for their situation.

Investing out of state in your situation doesn't make any sense.

I would partner with a professional REA who can give you and your partner a realistic idea of what you can afford and how much the "cost of money" will be for you two considering your individual situations.

Assuming your market is out of wack with that pricing, which CA always is, you do not invest.Owners of rent controlled properties are in a very difficult situation, as you will also be in if you buy, so your goal is to take advantage of that fact.

I know there are ways to avoid this in the future, but I'm hoping to find a solution for the current situation. 

How would i handle this situation.