After the renovation is complete and you're renting the unit, not having to worry about tracking physical keys is a super convenient perk for residents/guests, and also has the added benefit of minimizing the amount of lockouts and other headaches you'll potentially have to deal with later on down the road. 

Is there any benefit from local companies?

An additional benefit of a detailed engineering-based Cost Segregation Study is that it can increase potential insurance premium savings as well as provides support for the property tax appeals process.Additionally, it can help maximize renovations and improvements.A Cost Segregation study is an IRS approved federal income tax tool that increases near term cash flow by utilizing shorter recovery periods for depreciation to accelerate return on investment.

You will be house hacking and benefiting from your primary loans.

On the upside, the potential for significant cash flow, leveraging your $800k equity, appreciation in Oakland's booming market, and the benefits of a 1031 exchange make it a bold move.

I'm assuming you'd want to use this benefit for a new construction to get exactly what you want built, since finding this type of property already built & ready for sale isn't ideal, not impossible, but not ideal.

I have been asked if it was a possibility several times and have never accepted however An argument can be made that there are some substantial benefits.

The rental property itself provides the tax benefits and not necessarily the entity structure.Depreciation should wipe out your cash-flow from being taxed, especially given the high prices of properties right now.You should have your tax returns reviewed if your properties are reporting positive taxable income.

The investor must consider whether the potential property value increase or other benefits outweigh this loss.

It really depends on how much % of your VA Home Benefit you used up (have left over).