This approach balances cost-efficiency with liability protection as your business grows. 

I am thinking more from the insurance and future liability stand point.

Licensing fees, CE classes, E&O insurance, general business liability insurance, sentrilock/suprakey fees, board association, etcc.

I'm unsure of the tax liability/taxable gain due after the sell.

@Rod Merriweather Getting a LOC (line of credit) secured by real estate from a bank is going to be tough as the line of credit is viewed as a short-term liability while the property is a long-term asset.

You should have an umbrella policy to cover everything, beyond maximum liability coverages.

An agent has a fiduciary duty to protect your best interests, which include protection from the many different liabilities that can pop up during the course of a transaction.

I commonly hear that permitting is not an issue unless I am touching plumbing or electrical but just to be safe and avoid any future liabilities, I am trying to understand it is even feasible to get the new rooms/garage permitted for their intended use.3.

Short-term rentals require adherence to specific ordinances, and forming an LLC offers liability protection but incurs California’s annual franchise tax.

@Charlie Martin Buying under an LLC offers liability protection and separates business finances, but it can complicate financing with higher rates and stricter terms, and lenders may still require a personal guarantee, impacting your DTI.For your first property, consider purchasing in your personal name for better loan terms and transferring it to an LLC later if needed, while using strong umbrella insurance to mitigate risk.