Quote from @Michell Chase: I am working with a hard lender on a purchase/reno and they require a builders risk policy even though 1 unit of the 3/4 will have a tenant.  

Why would capital requirements be any less than traditional development? 

If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee.

Moving walls usually requires figuring out what is or isn't load bearing and likely putting a large and usually expensive header.

However, we do have a few hybrid properties listed on Airbnb with a minimum stay requirement of 30 days. 

One of the properties is a three bedroom with no garage that the tenants pay on time but require more of my time than the others .

Are some of your bigger buildings more than 16 units (requiring an onsite manager)?

Ideally, finding a lender who offers a balance of both is key. 

Here is text from sb13 “the violation is not necessary to protect health and safety, as determined by the enforcement agency, subject to specified requirements.” 

Home was nice 4 Bed 3Bth under $550K with a decent size lot/yard and it only required 5% down as a New primary.Now I am not sure how big of a home you need but as you can see $100K covers much more in a scenario like that one above.