I pay all utilities and make them pet friendly.  

you are able to utilize the DSCR loan which is limited doc and are able to cashout upto 80% of the equity .

They are your customer but that doesn't mean they can dictate how you run your business.

Marco,I'm extremely close with a RE attorney who got a template off the internet and then customized it. 

Customize Your Lease for Room RentalsEven though you’ve got the BP lease agreement, I’d recommend tailoring it to fit your specific room rental situation.

These both seem somewhat high though considering I’m not trying to build anything too fancy or custom.

Were utilities on and paid in full at all times?

Landlords are generally not allowed to turn off utilities, even if the tenant is overstaying their lease or hasn't paid for utilities.

I would advise against for residential customers, since those units are simple and have straight forward maintenance that can be covered in an annual “tune-up”.

That way regardless of 2-4 units you can add an ADU for you or as extra rent per month.Most of my customers tend to buy outside of CA but it is possible to buy in Cali if you are going to buy as a primary home.