We already went through the application process and permits are ready to go but the previous contractors was unable to start the job.

The $5000 upfront will cover permits, engineering and drawings.

You can have 20% cash on cash for 6 years and year 7 the thing could burn to the ground and your insurance company refuse to pay then your tenants sue you.So the result will only be as good as the accuracy of your assumptions permit, but IRR and the like are important tools to model various scenarios and gauge your risk/return using the information you have today and your best guesses for the future..

Hello BP,   I'm wondering if there are any tips on how to speed up the permit review process and to get a feel for how long it takes others to get them reviewed and approved. 

To get a short term rental permit in the city of Portland you must live in the address of the STR 9 months out of the year and prove this by providing a copy of your driver's license with that address on it...unless you have a po box on your DL.

A work permit is required. 

Other than that, I would just make sure you are apprised of any and all STR regulations/permitting requirements for the municipality, county and HOA.   

The one hiccup we've had is that the roofs were in worse condition than believed - the owner mentioned that some of the roofs were recently done, but during due diligence, the inspection came back with a majority of roofs needing significant work; this was verified by the fact that there were no permits pulled.

If your area has their permit services available online, search for major repairs over a 10-15 year range.

Or, if Santa Barbara does not permit any STRs at all, they might just be betting they won't get caught (not a wise course of action, IMO).Definitely do the research, because if there's a way to do it legally, I'm sure you could make a killing from an apartment like that.