There is no rational reason to not get a permit.

To me, the only real rational reason a buy-and-hold investor would purchase in SF would be for the appreciation - they you'd be giving that up for some help with the down payment. 

It only gets worse from here.It sounds a bit like you are trying to rationalize the situation in order to fill your vacancy.  

He gave one example after the next from his 5 days a week normally spent not dreaming about whatever, but practicing law IN THE MKE CTY COURTHOUSE and it was one after the next where reading the law and hearing both sides, any rational person would say "sounds like landlord wins"-WRONG!!!!!

Many of these "investors" are really looking to just park their cash and maintain purchasing power instead of investing on a rational self-maximization basis.  

Like I said, my gift to the boards is to help folks think and rationalize around the asset class.  

You will be paying the interest to your self, the rate is usually prime + 1%, you have 5 years to pay it back and it doesn't count towards your DTI ration because you are borrowing from yourself.  

I get theimpression that some LLs try to rationalize a foreclosure as if it's some sort of act against the homeowner.

They will care about the Debt Service Coverage Ration (DSCR).

Vacancy rates are higher in my town than other neighboring towns so it makes my strategy choice even more difficult I am just getting back into real estate so I am hesitant to go against the grain but my rational brain tells me it's the smart move.