I look at their facebook page (found pics with him and his homeys and guns), google for name and city and 'mugshot' and have found several. 

The status quo was generating no revenue at all, so my downside was limited.There's no City-run inspection programs here, so there's no certificate of occupancy stuff to worry about in the same way as there are in other markets.  

IanCheck out my profile for my Facebook page that has free business and real estate tips Are you familiar with condo investing in NYC?

I have had more trouble communicating with my corporate attorney that lives 20 miles from me than the attorneys at Anderson.Note:  With Anderson, you might have to work to stay current with the entity creation process since they don't seem to be lavish with status updates.  

@Chris Sukala, one more lingo query: you wrote "both houses are their own entity", but, unless they can be SOLD separately, I would not define them as having their "own entity".And certainly, if it turns out that there is only one water meter between them, that also adds to their non-own-entity status (and would be one extra expense to allow for).

South of San Francisco is the Peninsula and the South Bay, aka Silicon Valley, which is home to many notable tech companies like Apple, Google, Yahoo, Facebook, Oracle, AMD, Adobe, Intel, Netflix, Cisco, HP, EBay, Marvell, Altera, Ericsson, IBM, Hitachi, Kaiser Permanente, KLA Tencor, Qualcomm, Quantum, Xilinx, Tivo…… I could go on and on, but you get the picture.

In this case, it was my understanding that SEC guidelines would not come into play based on my relationship with the investors & their accredited status.

Even if it goes to pending status deals fall out of escrow all the time.

There is a steady influx of new businesses including tech companies like Facebook and Amazon into Columbus and as the state capitol, there is always a solid government workforce that is looking for housing.  

I agree with several comments above - it was probably your responsibility to investigate the legal status of the basement apartment during your due diligence period.