This includes verifying income stability, rental history, and conducting background checks as permitted by law.

If someone dies in the bedroom and there is not an egress window, you face serious liability.Ultimately you will need to pull permits, so talk to the permit office.

And of course there's the standard closing costs of the loan, initial insurance payments, permits etc. 

I added a Master Bedroom and Bathroom which required a Floodway Permit. 

And when did your building permit get approved?

The value of 3 acres zoned multifamily vs 3 acres that has full entitlements (meaning you just go to the city to pay permits and start building) is significant.  

In hindsight it would have been better to have a contractor working under a fixed price contract to complete the work by a certain date including inspections and permits etc...

You will not prevail in a California Court if your PM permits weeks to go by before inspecting.

January 2024, and still as of now they haven't start construction and supposedly because it's a new year, all approved permits have to reapplied since they never started construction. 

You can do a ‘cash out’ refinance on the rental home as a permanent fixed 20-25-30 year loan to pay off the Heloc on the primary and most likely the equity line on the primary permits a ‘re-draw’ to utilize again.