To today I have completed construction 2 DADUs and just got permitted for my third.  

I got plans and a permit to legally add it to the sqft.

There is a woman that I know who is an active investor and is involved with Partners currently, and I've been picking her brain when time permits to see what works in Partner's structure, what could be better, and what needs to change. 

Summary of the changes are:Elimination of Single-Family Zoning: The amendment removes zoning districts that previously permitted only single-family or two-family residences.

These properties can be a lot of work through getting permits, remodeling it and sometimes city wants new codes for the property too (I.e. fire sprinklers etc.).

Plus if I'm reading your post correctly, if you did it without permits, depending on your market it may not have much value anyways.

I have a client that did a conventional construction refi and it took him 7-8 months due to the city permits and all.

Got lots of experience Rehabbing Homes including my love/hate relationship with the Department of Planning and Permitting.   

Because flips are considered inventory (not capital assets), profits will be taxed as ordinary income rather than qualifying for long-term capital gains treatment.For tax filing:Report expenses like construction costs, permits, and interest as part of your cost of goods sold (COGS)—these won’t be deductible until the property is sold.Since no revenue is expected in 2024, your S-corp may show a loss, but that loss won’t reduce personal taxable income until the sale occurs.Each partner will receive a Schedule K-1 every year, including 2024 and beyond, as long as the S-corp remains active.Unlike an LLC, S-corp shareholders do not pay self-employment tax on their share of profits.

Market 1bd rents are about $1500-$2000.Ideally, we would have 24 months to get thru plans/engineering/permits/rennovation.