Permits.

As small lot subdivision permit takes a year; my plan is to start the construction in 2017.

12% + 2 points is a pretty common one and what I'd ask an investor for to start/build the relationship. 6 months is common, it should only take 3 but it allows for that wiggle room should their be any delays, issues, large rehabs, permit issues, long closings.

I chose to get the home improvement registration which allowed me to use unlicensed  carpenters to work on my properties and it allowed me to pull my own permits.

Was it difficult to obtain permits (if you needed them in your area) and how long did the process take?

Making the basement a legal ADU would require removing the concrete and digging the floor down some to get to legal ceiling height, Another option would be to make the basement legal living space with less stringent permitting requirements by legalizing the old basement stairs -- not sure how much that would cost -- guessing 10-15K.

So I'm in the process of buying a home in Newberg, OR (wine country) that I intend to turn into my first STR and I'm coming up against a really ridiculous permitting process.

I know there are multiple costs involved- from the land acquisition,to any city rezoning/permitting fees, the site and utility prep, architectural plans, and actual construction of the units.

Sometimes getting permits is tricky, but I just explain it was a sheriff sale and the deed is going to take a bit of time; that usually works in getting the permits when you are not yet named on the deed.I will point out that though there is no redemption period on PA mortgage foreclosures, the sheriff sale can be challenged within thirty days of the sale.

Rules are the same whether it's in your name or LLC, however, every time you file an application with the City(POS, rental, assumption, permit) you put your SSN on it vs EIN for your LLC.