But it is the lowest down payment option, and likely the lowest rate option as well. one tidbit - condos don't usually like the STR piece, so make sure to do your DD in whatever area you're looking to buy in before puling the trigger. 

This setup ensures that I stay in compliance with California’s FTB requirements.

Your attorney or CPA should be able to create tax efficient structure for you.To avoid this, keep management and decision-making localized to Alabama, and consult a CPA or attorney to ensure compliance with both states' regulations.This post does not create a CPA-Client relationship.

Can you ever use these funds as they accumulate to go purchase another property or does that trigger taxes?

A bit about me: I’m a payroll manager for a restaurant group, where I handle everything from creating policies and SOPs to processing payroll and ensuring compliance with state and federal laws.

Definitely wouldn't trigger the clawback penalty but it's still good to be aware of it.  

If this were a brick and mortar bank (now I switched to one), this would have been flagged to me before the bank took the action of refunding the money, triggering an investigation.

I will be going down there in a couple of days, and interested in building/developing/investing, I am a licensed Mexican Architect, I have friends living there as realtors, US investors, and US builders ready to pull the trigger. 

Since the property is under mortgage, just transferring to LLC will most likely trigger the "due on sale clause".3.

In many cases it is fully legal so long as it is your primary home and you occupy one of the units but definitely make sure you're in compliance before you move forward.