Sure it costs more but it ensures we put our best foot forward as conditions change...I feel the best option is to address the committee with sale documents, mortgages, deeds (where the attorney comes in) and market comparable and trends (using a real estate professional...I have that handled :) ). 

To make it simple, I take average price per square foot sold of a non-basement house and halve it.

@Reynard Azada - Rent will go up little by little, but there is a lot of competition in the neighborhood, rent is about $1 per square foot right now in this market.

Got to the basement, tore off the basement walls & bingo big problem.

There's no limit to the excuses we can make.Are you a 5-foot-tall black man born without arms in South Carolina?

Maybe focus on the price per square foot and not so much on the zoning?

My overall opinion is that your analysis is not realistic.he said he is getting an owner occ loan so interest is probably about right.. not sure where your getting the 23 a foot.but to build in the bay area a 3k sq ft home brand new for 700k i have a feeling that number is light and maybe thats what your saying.I was just talking to a client of mine and he is looking in the foot hills on the west side of the valley and figuring 3 mil for a lot and 2 mil to build all in 5 mil.  

A house-hack deal would be ideal for a first investment as it will allow you to get your foot in the door with a low down payment.Best of luck to you moving forward!

Property is an 8 bed 3 bath - 2 story Brick building built in 1880 with  total floor area of 3250 square feet on a 2500 square foot lot.Asking price is $48,000 Unit 1 & 2  - 3 bed 1 bath.   

First progress payment of $15,100 plus any permit reimbursements will be collected after the addition’s footings are inspected and approved by the City of Los Angeles Inspector.   3.