I was one of the fortunate ones that was able to get out of the contract and after all expenses (forfeited deposit, legal fees, holding costs, etc) lost less than $20k.  

Who would not want a legal, permitted unit for $8k or anywhere close to that (i believe the $8k is likely optimistic)?  

Health and safety inspections don't seem to care much about zoning or permitting issues.

It couldn't hurt to call a couple attorneys right away to see what they say in terms of cost and suggestions for dealing with this quickly.In terms of mitigating any legal issues with your tenant be sure you are documenting every conversation you have had with the HOA in terms of asking them to make the necessary repairs.

Understand the local permitting requirements, keep eyes on your property to avoid squatters, and make sure you have a great vacant insurance policy while you're renovating.

This doesn't replace the need for a MSA that will capture additional clauses needed on a Contractor-SubContractor relationship, this is just a project specific form you would use in addition to the MSA (prepared by your Attorney):This template is for informational purposes only and does not constitute legal advice.

Basically, "wholesaling" is no longer permitted. 

For every day after the 30-days, the permit fee is reduced by 10% of the permit fee.  

You cannot even apply for an STR permit on a single family home until after you've owned it for five years (and there is no guarantee you will get the permit).

The location is ideal, as it’s situated in a neighborhood that permits short-term rentals (STRs), making it a great investment opportunity.