Which makes me wonder why here in Los Angeles there is an extreme housing shortage, rents are going through the roof, the state recently passed an law making Accessory Dwelling Units easier to build in an effort to mitigate the the housing shortage, property values are at a level at or above the housing bubble peak. 

Make sure it’s a dwelling policy and not a homeowners policy otherwise if you rent out your place you’ll void your insurance

So if a dwelling cost on average 20k to bring to average condition the market will discount that property much higher then 20k allowing the frugal and knowledge rehabber immediate equity.

✓Second Home Requirements  must be occupied by the borrower for some portion of the year  is restricted to one-unit dwellings must be suitable for year-round occupancy the borrower must have exclusive control over the property  must not be rental property or a timeshare arrangement1 cannot be subject to any agreements that give a management firm control over the occupancy of the property

INSTANT cash offer today  .. call today for cash quote... etc etc.

@Michael Pursell following up on @Charlie MacPherson good comment you also may want to pay attention to the exact wording of this stuff and how its individually interpreted by the various building departments: Accessory Dwelling Unit, In-Law and other terms may mean something slightly different town by town and be treated differently, likewise if you owner occupy or not. 

This property was 3 units with an old not in use attic unit which when we saw our eyes lit up and instantly thought of opportunities.

I am curious since the cottages sound like smaller dwellings.

It would instantly sell his property at the price he's asking, all while getting me started in real estate.

One thing I will throw out is the new Accessory Dwelling Unit (ADU) Law that was passed in California, allowing you to rent out a 2nd unit even if its only zoned for 1 unit.