However, the fed regulations say something like the loan can only be for a flip, not an owner-occupied.

Personally, if no windows, electrical, plumbing or structural work is being done I would just get it done.....typically no permits are required for that but theusually are supposed to have “some kind” of license...here in PB county it’s not just the regulated contractors (gc’s, plumbing, electrical, ac, etc) but guys just doing painting, Sheetrock, etc. .....not that it happens all the time of course.

Hi, I am planning on purchasing a new property in the next 3 months. I want the property to have multiple units and have looked at duplexes-quadplexes, but are most likely going to settle on a house with a basement th...

I am not super savvy on the rules of lending so I am sorry if my question proposes something against lending regulation. 

State law and regulations control CL100 issues.

I see on https://actonadu.com/learn-about-adus/adu-regulations-by-city/san-jose-ca-adu-regulations can have only 1 bath.Is it allowed to have second one as 0.5 (is it still considered bath)?

Definitely starting out right - you're about to gain priceless knowledge on the PM, rehab, tenant, regulations, and I'm guessing finance fronts of this crazy game.

Its a highly regulated industry - I would suggest you consider just finding a brokerage that will work with you - there are many.  

However, I would do some research on what type of notice the regulations require in that situation. 

Most new investors rarely consider the consequences of actually having to work with people and will not even bother learning their state landlord tenant regulations prior to investing.