Freddie has similar intricacies, but also does not require a two year history of receipt; https://guide.freddiemac.com/app/guide/section/5306.4If you can use the rental income to drive the DTI down so that you can reduce the down payment similar to that of the FHA product, the benefits of the conventional option will outweigh the FHA option, as I'm assuming you have a strong FICO based on rate quoted with no points.  

They realize the due on sale clause could get exercised and believe the risk is justified by the reduced rate.

I understand that the investment or time and energy is required and correlates with success rate.

In the meantime, enjoy the free energy they provide?

For me they've been a great source of ideas, resources, energy, and comradery.

We serve plenty of flippers/wholesalers who make around $500k/yr and some are higher.Once your salary is replaced (or a good portion of it), then stabilize the flipping/wholesaling with a great team so it doesn't require as much of your time/energy.

Ok, if it's still sounding do-able, the next issue is that section 179 can't be used to create a business loss, so it would only reduce your taxes for the year if your rentals are operating as a taxable gain (but rentals are often at a tax loss thanks to depreciation).  

It’s still a worthy strategy to force cash flow that’s rare to find in SoCal, especially if you can reduce the cost of construction by doing a conversion/using an ADU grant or even buying a property with an existing ADU In general, even if the ADU valuation matches your cost including grants, they are usually not worth it in southern CA in single family zones. 

Using a 401(k) loan reduces your emergency liquidity, which could make the investment riskier if unexpected costs arise.

 $9k/$72500=12.4% Rate of return (not including any closing costs which would reduce this return).