The downside is that depending on your state, having a license could impact how you will operate as an investor in terms of having to disclose to potential sellers you licensing status etc.

I should disclose that I have not been looking into any rentals until now since I was rather focused on finding deals to wholesale or flip locally in Southern California.

And if he prefers to cater to borrowers with such lousy credit they are afraid to disclose their credit history via a SS# credit check, I think his rate would have to be much higher than 5 %.

in my mind your risk is from your conscience  or your carma or your god.. take your pick.Or just disclose up front that you are going to try to resell it and make a profit over what you are paying the seller and if your efforts fall short then you do not get compensated and the seller after the period of time you negotiate to sell said property is free to work with anyone else.were this gets dicey is the subterfuge that goes on in the industry IE you telling someone your the buyer when you know in your heart your not and your trying to make a marketing fee.In some states this is considered selling real estate without a license and you can get in legal trouble.but as a whole there are no code of ethics in the wholesaling space.. its a free for all so let your conscience be your guide.  

In Florida, the banks can disclose a reserve price lower than full judgment, bid with a credit amount all the way to the full amount of their judgment, or mark their reserve bid as "hidden".So if a foreclosure investor bid $90,099 in the online auction, and the bank's reserve was $300k, then the bank would take the property back with a assumed price of $90,100, even though the amount they were owed was much higher.In other words, the bank's assumption price is completely irrelevant to your offer.  

The seller of this property disclosed his full profit and loss statement for the past 3 years, and I believe his rents are under market.What is the best quick and dirty way to assess market rents for the units within a duplex/triplex/quadplex?

You will need to disclose the circumstances of how you are acquiring the property.

If I had derogatory credit I would disclose this right away and make sure I met eligibility guidelines9.

All of the situation was disclosed and they said it was no problem, apparently it is. 

However, it's pretty hard not to disclose your intention to flip it as most loan forms will ask if you intend to occupy the property.