I would also say it depends on your goals and what your business currently needs.

Several years ago, even with high cash flow from a business, I felt fairly locked out of the places I wanted to purchase due to endlessly rising prices and rates that required constant underwriting revisions to the point where it wasn't worth the time expense. 

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

Also the best businesses have some sort of a market budget typically.

Yes, we have a few different accounts 1. operating expenses for the business 2. one account where all rents and cash reserves for maintenance are held 3. security deposits 4. company taxes 5. company savings 6. company salaries, etc..

the permit or business license or both?

(we live in a tiny house on the acre separate from the house)Has anyone dealt with something similar or know what is the best way to make that income usable for a loan?

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

have been keeping me busy for the last 10 years or so.

This isn't a personal relationship its a business one.