The permits and architecture was done prior to start.).For most people the finances are the limitation to scale.  

Also if this property is on septic that also can throw a wrench into the ability to call a space "a bedroom" as septic systems are sized and permitted based on the bedrooms.

Ensure you understand local regulations regarding permits; it’s usually a good idea for your associates to form an LLC for liability protection, but individuals can do renovations as long as they pull the necessary permits.

You also mentioned meters, do you have to separate meters, get approval from the city and pull permits?

You cannot even apply for an STR permit on a single family home until after you've owned it for five years (and there is no guarantee you will get the permit).

Tahoe isn't ideal right now as the local community is vehemently anti-Airbnb and the permitting system is challenging to navigate.

Also know that building a home seldom goes as expected - I have relatives that just built a nicer house… they thought it would take 9 months… it literally took 18-24 months between delays in permitting and the builder just not being able to get it done in a timely manner - often due to sub-contractor issues.  

Insurance- coverage for new engineering, permitting, etc8.  

Good points.I'd add square, level, plumb - license, insurance, bond - using permits to follow codepointing out problems the owner doesn't realize they have that are serious. 

thanks for the guidance @Kaushik Sarkar Since it's development it will take longer to get to the exit. 3 years could be right depending on the market, if the project requires entitlements, how long it takes for permits, no major utility obstacles, etc.