For sustainable financial independence you need roughly 4% of your total net worth to exceed your annual spending.  

Here is a good site to help with that. http://usurylaw.com/state/In California you can not charge more than 10% annually as a private investor, this would include points and fees, unless you have a broker involved.  

Is it really true that I can establish a Self-directed Solo 401k account with a local bank and then no need for Custodian fees (okay, maybe the bank will charge an annual fee as well), but no need to establish an LLC and pay that set-up fee and annual state tax?

For example, the first property, I just looked up has an annual rent income of $13,920 with asset management fee of $1619 or 8.83% of rent.

I am doing my analysis as if I was to rent out all three units.The three units are fully rented out for $2,750 but believe I can increase this to $2,900.Analysis based on annual numbersRent Revenue = $34,800Principal + Interest = $18,792PMI = $3,312Taxes = $4,300CapEx = $2,784Vacancy = $2,784Property management = $3,480Water + Sewer = $2,400Net Profit = -268Based on my calculation, it may seem like a bad deal.

I'm in your neck of the woods every May for the Berkshire Hathaway Annual Meeting.

I ran my annual free credit report and that's how i saw they were showing up. i'll definitely look into Credit Karma, though.

Annualized = $4320.

It would also be a good idea for you to do semi annual inspections, then you would be able to get to the problem sooner.

that could provide 60k income annually from interest alone.