This setup ensures that I stay in compliance with California’s FTB requirements.

In many cases it is fully legal so long as it is your primary home and you occupy one of the units but definitely make sure you're in compliance before you move forward.

I mean, you can, but you won't be in city compliance or insurance compliance if something were to happen to them.

Where are you with the city required Certificate of Compliance process?

All these providers balance speed with compliance, so it’s worth consulting with them to compare timelines, costs, and support for your specific needs.

Review your loan agreement for restrictions, and consult legal and tax professionals to ensure compliance and protect your interests.In C State, you can elect to file MMLLC as disregarded entity for tax reasons.

I have 17 years of corporate RE and compliance experience, so the LIHTC reporting and annual financial audit does not scare me.  

Permitting for additional bedrooms and garage conversions requires compliance with zoning and building codes.

Always keep personal and business accounts separate, document all transactions, and consult a CPA or attorney to ensure compliance and maintain liability protection.This post does not create a CPA-Client relationship.

For the modifications, cities generally focus on safety and code compliance, but since you're considering structural changes like wall removal and garage conversions, obtaining permits is key.