They provide no real protection at all for the borrower/contractor relationship.So, if your house had some plumbing work that was done, and your contractor did not pull permits and they did not have the city inspect the work, then when you go to sell the house you will get caught and they will tell you that they need to open the walls to inspect the plumbing and then closing the walls and repainting are on you.The draw process is way too easy, I've learned that it is sooooo worth paying your personal inspector like $100 to do a deep inspection. 

The Airbnb will give some higher returns, but due to permitting in DC we wouldn't be able to run it as an Airbnb after we move. 

We still need to work with the city to ensure we can rezone and get permits to start construction (but for this thread, it's implied that we will get the permission to rezone and start construction.)4) What other steps should I be thinking of?

I would talk to the building department that issued the permit.

Some will tell you "On Title, or no experience", thankfully, there are some lenders who WILL consider GC experience if we can validate with permits pulled on similar addresses/projects - this would be part of the underwriting process.

And I can see the newcomers wanting to work , but not having the right papers makes it impossible to legally hire them .

Whether you're a seasoned pro or a newcomer, our diverse community warmly welcomes all.

Our plan was to do an ADU garage conversion (I know, super original), rent it out Short term / Med term, and then spruce up the main house after a couple of years of the ADU income.So, we started the ADU permitting process right away…The main house was livable but very old.

John I wanted to reply to your comment but ended up creating a new comment under the post, hahah!

Keep in mind if on well/septic there are likely acreage requirements-Site Engineer, does your area require a site engineer to draw up plans, pull permits, determine right of ways et with fire/utilities.