Strongly consider using a Certified 203k Contractor. 

Naturally, we asked the cost segregation company to adjust their report.

Looking for a "Board Certified Attorney" related to real estate would be your best bet.

This adjustment leaves me uncomfortable, as it would deplete my emergency funds.  

As someone who reports to sec for our loan portfolio - blows my mind how loans held for sale must be reconciled and valued frequently where as held for investment never have to be adjusted.

Too few details to answer (Of course this varies county by county, all questions could be answered by reading the (zoning)/building code and/or clarified with a visit to the county planning office).but some clarifications because: lots of things are "tiny homes" but what you describe small houses "on permanent foundations" needs to be clarified , tiny homes could be:-stick built, see below. check your county code/planning dept-stick built cabins/recreational, a specific zoning and potential occupancy/etc restrictions but worth looking into where the zoning allows for it -hud manufactured homes (smaller singlewide perhaps 400sq ft 600sq ft minimum)-non-hud park models (on axles), ansi standards- other "RV's" built on a chassis:  organizations, state agencies, etc - will certify factory built (or sometimes inspected professional built) tiny homes on chassis - to whatever standards ansi, riva, dot/ l&i?

Keep going, trust your instincts, and don’t be afraid to adjust your plan as you learn more.You’ve got this!

Understood - so say I sell house in Sep-24; then I can adjust my remaining paychecks to catch up to 110% of 2023 tax to avoid tax penalty or I need to start having higher withholdings now?

I will be adjusting my prices as we just got awarded "Guest Favorite" plus AirBnb Top 10% listing.  

While the leverage may be lower, banks typically offer fixed-rate options instead of adjustable rates.Remember, each property tour is an opportunity to gather valuable insights and make informed decisions.