If you don't provide the information that's fine, but it would be a transparent answer.There are hard money lenders who underwrite to DSCR standards with their own rules, and commercial loans with use DSCR in various  applications. 

@Elliot Rosen, do you understand the issue?

I'm also a former math teacher, so trust me, setting up an S-Corp for operations is NOTHING compared trying to get 30 twelve year olds at an urban school to learn math according to state standards.

In the City of LA these unpermitted units typically still end up with a decent amount of construction work to bring it up to current code standards, but if you plan for it, and your budget/proforma allows for it, it can be an acceptable investment.

Search 'STR arbitrage' on this forum to get an understanding of what it entails.

It's my understanding that the city is responsible for all the piping up to the curb stop in my front yard and I am responsible for the curb stop to my property.Yes from the water meter to the house is generally the owner and from the main line to the meter is generally the city.. 

Landlords can enter a tenant's property for a variety of reasons, including: Making repairs or replacements Responding to a tenant's request Removing unauthorized window coverings Preventing waste of utilities Changing filters, testing, or replacing smoke detector batteries Inspections Helping with an emergency inside the unit Posting a notice of eviction"Research your state laws because some of your comments indicate a lack of understanding of the landlord/tenant laws where you are operating (like threatening the tenants to keep the security deposit if they don't respond to you, I doubt that is actually a valid reason to keep their deposit, or evicting for late payments, or charging the tenants for your warranty repairs because you missed your 11 month inspection window which was your responsibility, and it looks like your lease says you can charge up to 18% interest for unpaid fees, is that actually legal?).

Augustine standard where most in fill lots are around 50' x 100' to 125', 200' deep dryland is a good lot.

From what I understand, a 1031 exchange doesnt apply in this case, and so I will have to pay short term capital gains on the appreciation ?

Make sure you understand the difference between capital expenses that get depreciated over multiple years and regular expenses that get deducted immediately.